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In the wider world (now I'm creeping back to what I know, aviation again, sorry) it IS called "leasing" Roger - it's probably a "dry lease". (There are also "wet" and "damp" leases, but AFAIK, they don't apply to the car market).

And to further illustrate the points above about the difference between the initial price and "residual value" (which is what the professionals call it), instead of a car (ICE or EV) let's take the Boeing 737 Max airliner as an example.

A few years ago, when I was at a meeting of the world professional aircraft Lessors, when Boeing first announced the Max model of the B737 (to compete with Airbus's already-announced updated and improved model of the A320), the Lessors were all up in arms and dead against Boeing (and Airbus) going ahead with these new models. Why? Because Lessors could very well see that if the new models offered the fuel efficiencies promised, their "assets" (i.e. the existing models) would become of lower residual value almost overnight - or at least as soon as the new models became freely available - AND market monthly lease rates for the old(er) models would also drop in line with these new efficiencies to the operators - the airlines).

That is in fact exactly what has happened with the new model A320, but as became well known in the general media, the new B737 Max model has shown some deficiencies (to say the least!) and a short time after first entering service, has been (and today remains) grounded.

So those Lessors with the older (but still pretty efficient) model B737s in their portfolios are "making hay while the sun shines" (it always does for someone).

As far as I can see, about the only differences between the overall car market and the airliner market is A) the number of noughts it takes to buy an airliner rather than a car, and B) the fact that car manufacturers introduce new models much more frequently than airliner manufacturers do.

But make no mistake, the basic lease transaction "simply" involves party A lending a bucket full of money to party B (though there may well be parties C & D involved too - in both markets). With the relative volativity of the car market, particularly since the introduction of EVs, generally falling car sales just about everywhere outside China, and with the very high importance of "residual value", I just cannot believe that the professional financiers who are at the root of making car lease finance directly or indirectly available to the general public have not all taken these factors - and most especially the fast-moving technology in cars/batteries - into account in their calculations.

I therefore fail to see how a lease can possibly be financially attractive unless, A) you've got a business situation where you can somehow offset at least part of the lease payments, or B) you intend to "roll your lease over" into the next new car, be it ICE or EV.

But I'm just a "technician", and NOT a financial expert, so perhaps I'm wrong?

If so please correct me.
 
AES":3ksq6avl said:
I therefore fail to see how a lease can possibly be financially attractive unless, A) you've got a business situation where you can somehow offset at least part of the lease payments, or B) you intend to "roll your lease over" into the next new car, be it ICE or EV.

I know a number of people in both camps, the ones running a business do it mainly for the confidence in knowing exactly what their costs are per month excluding fuel but including tyres and maintenance and there were or are some tax advantages. One of these running 9 vehicles says it's the only way he can operate.

I have 4 friends who currently lease their cars on a private basis and in every case a main attraction is to just hand over the car and get a new one so they're pretty much locked into the system as none have the wherewithal to raise a deposit or a trade in should they wish to buy in future.

I can see the reasoning behind leasing an EV however due to expected but unknown technology advances, however I'm old school with a built in resistance to committing myself to something I might not be able to afford if my circumstances change which is what you do when signing a lease contract. I's possible that in the current crisis there will be many people who find themselves in that situation.
Owning my car means I can sell it at any time and owe nothing!
 
I think leasing is the sensible choice for EV's at the moment.

As far as I see it they are going to have a much higher depreciation rate than an ICE car. ICE technology hasn't really evolved much in the last 20-30 years, people know what to expect in terms of lifespan, repair costs and value. EV technology is moving very quickly and there are a lot of unknowns.
 
Rorschach, you wrote, QUOTE: EV technology is moving very quickly and there are a lot of unknowns. UNQUOTE:

Exactly, that's precisely my point, and I just cannot believe that financiers have not written that uncertainty into the lease rates for EVs, which - of course - the Lessee and NOT the Lessor is paying.

Therefore, unless the Lessee wants to "roll over" his lease for a new car in 2/3/4/5 years and doesn't have the money up front to buy; or unless a business needs the "value" of known monthly payments, as said, I just cannot see the financial sense in leasing a car, especially if it's an EV.
 
AES":200sceiz said:
Rorschach, you wrote, QUOTE: EV technology is moving very quickly and there are a lot of unknowns. UNQUOTE:

Exactly, that's precisely my point, and I just cannot believe that financiers have not written that uncertainty into the lease rates for EVs, which - of course - the Lessee and NOT the Lessor is paying.

Therefore, unless the Lessee wants to "roll over" his lease for a new car in 2/3/4/5 years and doesn't have the money up front to buy; or unless a business needs the "value" of known monthly payments, as said, I just cannot see the financial sense in leasing a car, especially if it's an EV.

I never disagreed with you that the lease rate for EV's is high, of course it is. What I am saying is I think it is probably better to pay that price than take the risk of buying an EV that in 5 years time might be worth scrap value of the raw materials at best and possible actually cost money to scrap due to being hazardous waste.
 
RogerS":2ka6nwcw said:
Rorschach":2ka6nwcw said:
.... ICE technology hasn't really evolved much in the last 20-30 years,..

You are joking, surely ?

No. Can you tell me any significant difference between an ICE car produced last year and an ICE car from the 90's?
I am talking propulsion/drive train of course.
 
Rorschach":qra1dwin said:
No. Can you tell me any significant difference between an ICE car produced last year and an ICE car from the 90's?
I am talking propulsion/drive train of course.

Modern petrol and diesel engines are much more efficient, have a lot more power, cleaner emissions, are hugely more reliable, and are far more driveable.

For instance buying an automatic 30 years ago meant accepting a fuel penalty generally considered to be around 10 mpg whereas current autos are smooth and quick plus many are more fuel efficient than manual cars and the damn things in the 90s were clunky and unreliable.
An average 2 litre car 30 years ago would produce not much over 100 bhp, the same size engine today is twice that in basic guise as well as being much cleaner, more economical and will start first time 99 times out of a 100.

I've changed my wife's and my own car every 2 - 3 years max during the last 30 years and much longer before during which time there have been huge improvements. I wouldn't swap backwards under any circumstances.
 
Lons":3d0b4ve6 said:
Rorschach":3d0b4ve6 said:
No. Can you tell me any significant difference between an ICE car produced last year and an ICE car from the 90's?
I am talking propulsion/drive train of course.

Modern petrol and diesel engines are much more efficient, have a lot more power, cleaner emissions, are hugely more reliable, and are far more driveable.

For instance buying an automatic 30 years ago meant accepting a fuel penalty generally considered to be around 10 mpg whereas current autos are smooth and quick plus many are more fuel efficient than manual cars and the damn things in the 90s were clunky and unreliable.
An average 2 litre car 30 years ago would produce not much over 100 bhp, the same size engine today is twice that in basic guise as well as being much cleaner, more economical and will start first time 99 times out of a 100.

I've changed my wife's and my own car every 2 - 3 years max during the last 30 years and much longer before during which time there have been huge improvements. I wouldn't swap backwards under any circumstances.

It's still the same basic technology though. Maybe I was being a bit over generous with my time span there, lets say 20 years rather than 30. My previous car was built in 2003, it's fuel economy was not much different to a similar spec new car today, it had a 1.2 engine would get around 40mpg city driving and well over 50mpg motorway, I once managed 62mpg on a trip. That's an almost 20 year old car. Is there is a similar sized ICE car built today that can do much better?
Now look at EV 20 years ago, they are nothing like those made today. 300+ mile range from a 5 seater EV? Dream talk, back then you were lucky to get 2 seats, let alone 3 figure range.

I am not saying there aren't improvements in ICE tech but it is nowhere near the scale of the improvements made in EV tech in the same time frame.
 
Rorschach":tb0gtx1a said:
I am not saying there aren't improvements in ICE tech but it is nowhere near the scale of the improvements made in EV tech in the same time frame.

Yebbut that's not what you said!

Can you tell me any significant difference between an ICE car produced last year and an ICE car from the 90's? I am talking propulsion/drive train of course.

Of course there has been and will be a huge development in EV, it started from a very low base unlike ICE which has been developed over the last 130 years. Comparing apples with pears in that context comes to mind when looking at your parameters of rate of development.

Just to respond to your comment about your old car, my daughter has had a succession of Fiestas, her last was a 1.2 which I think was 2010 model, she swapped for a 2015 eco 1 litre model with higher spec and is heavier but the engine is at least as powerful, the car is quicker, much smoother engine and a lot more economical. Ford aren't the only ones who have gone down that route so I can't agree with you.

My 2 tonne SUV with eco 6 diesel engine, 9 speed auto box and 230 bhp and returns real life economy in the mid to high 40s is way way beyond the capability of the cars I drove 20 years ago.
 
Fair enough, we can disagree on that.

Just to be clear, I did say "significant improvement". It's ok if we both have differing ideas as to what constitutes significant.
 
Agreed!

As I've said before I'm certainly not against EVs in any way but they're just not yet at a stage when I can personally embrace them, or afford what I would want from one!

Edit: On second thoughts I'll explain what I consider significant.
F1 which I follow has historically provided a lot of the technological advances eventually fed down to production vehicles, I needed to do a quick check but in very rough figures I think how they developed is pretty significant.

* Early 2000s engines were 3.0l with a power output of typically up to 950bhp
* 2019 they were 1.6l hybrid with ICE output of 875 - 1000bhp plus electrical regeneration of 160 bhp
That's without looking at the fuel consumption, emissions and drivetrain, gearbox etc which I haven't checked but know have seen massive improvements.

Going back to my daughters Fiestas I also think that the differences between the 2 cars less than 5 years apart was significant so yes that's where our opinions differ and I guess we aren't going to agree as you said.

cheers
Bob
 
ICE has improved significantly over the last 20-30 years in economy, reliability, emissions etc. But they have not changed radically - they still explode a fuel/air mixture to move a piston in a bore, to drive a crankshaft to get rotary motion. They are a function of well over 100 years development to optimise the technology.

I know electricity has been around for a long time and for special applications EVs have been used for decades (eg: milk floats!) But EV's as an alternative to ICE personal vehicles are the product of at best 20 years development.

It can be no surprise that progress made in a new technology in a (say) 20 year period is far greater than in a technology which has developed and evolved over the past 100+ years.

The first modern ICE was created by Nicolaus Otto in 1876. In 1886 the first commercial ICE car production was started by Karl Benz. It's probably fair to say that the EV of today is (roughly) where the ICE was in 1920 or thereabouts - the technology is proven with a probable long term future, from which it can be developed materially.

In 20 years time the EV will still be very similar to the EV of today - it will have a battery, motor, control systems etc. It will be more powerful with longer range, lighter, cheaper to make etc - precisely as the ICE of today is similar to the ICE of 20, 40 or 60 years ago.
 
Terry, that's over simplification imo. It's like saying that humans, haven't significantly developed over centuries because basically we still breath air.
 
Lons":1i8wht3b said:
Rorschach":1i8wht3b said:
I am not saying there aren't improvements in ICE tech but it is nowhere near the scale of the improvements made in EV tech in the same time frame.

Yebbut that's not what you said!

Can you tell me any significant difference between an ICE car produced last year and an ICE car from the 90's? I am talking propulsion/drive train of course.

Of course there has been and will be a huge development in EV, it started from a very low base unlike ICE which has been developed over the last 130 years. Comparing apples with pears in that context comes to mind when looking at your parameters of rate of development.

Just to respond to your comment about your old car, my daughter has had a succession of Fiestas, her last was a 1.2 which I think was 2010 model, she swapped for a 2015 eco 1 litre model with higher spec and is heavier but the engine is at least as powerful, the car is quicker, much smoother engine and a lot more economical. Ford aren't the only ones who have gone down that route so I can't agree with you.

My 2 tonne SUV with eco 6 diesel engine, 9 speed auto box and 230 bhp and returns real life economy in the mid to high 40s is way way beyond the capability of the cars I drove 20 years ago.
I think based on actually efficiency of energy in movement out, ICE are still well away from Electric motors. Even the best engines are only about 25% efficient - where the rest is thrown away as heat. Compare that to 85% for Electric and it doesn't look so good. So improvements have been made, but it actually isn't massive when you compare the alternatives.
 
Terry - Somerset":qthli2fk said:
ICE has improved significantly over the last 20-30 years in economy, reliability, emissions etc. But they have not changed radically - they still explode a fuel/air mixture to move a piston in a bore
If an engine didn't do that I don't think it would be classified as an internal combustion engine (ICE) so maybe that isn't really a fair criticism of ICEs.
 
Lons":2775qkjs said:
Agreed!

As I've said before I'm certainly not against EVs in any way but they're just not yet at a stage when I can personally embrace them, or afford what I would want from one!

Edit: On second thoughts I'll explain what I consider significant.
F1 which I follow has historically provided a lot of the technological advances eventually fed down to production vehicles, I needed to do a quick check but in very rough figures I think how they developed is pretty significant.

* Early 2000s engines were 3.0l with a power output of typically up to 950bhp
* 2019 they were 1.6l hybrid with ICE output of 875 - 1000bhp plus electrical regeneration of 160 bhp
That's without looking at the fuel consumption, emissions and drivetrain, gearbox etc which I haven't checked but know have seen massive improvements.

Going back to my daughters Fiestas I also think that the differences between the 2 cars less than 5 years apart was significant so yes that's where our opinions differ and I guess we aren't going to agree as you said.

cheers
Bob

I loo forward to being fed down 1000bhp

PS I know what you mean. :D
 
I've put this here because although its not immediately about EV's its about the cause of driving so far so often.

I drive typically 18,000 miles a year. I have a salesman who often exceeds 25,000 and so EV's are a bit unrealistic for my business. BUT....

I have spent the past 2 weeks calling and talking to my customers. Reminding them of the coming Armageddon and suggesting we do something different to give them support. That is we create a cloud based app which will permit us to connect to their systems via a highly secure interface. Thus we sit in our office doodling on our keyboards instead of travelling by car. A sort of NOC for AI software for those of you familar with NOCs.

I was encouraged by the responses. Of our 100 highest spending customers 47 have said yes, 14 have said maybe and 39 have not made a decision. The app is minimal, the time and mileage saved could be of the order of 6 man years mileage could be around 120,000 ++ miles a year. Coronavirus Covid-19 has perhaps been the impetus to consider new things just to keep their business up and running as the expected 4 to 6 million people in the UK are infected..

Software already exists to legitimately penetrate and take over access to their systems and adding 256 bit security to that does not seem difficult. Most of the complexity seems to be in forming and config of the networking bits.

So prior to any purchase of short range EV cars I may have a partial way out of my dilemma about how to disperse the company/or not. I will of course also delay decisions about purchase of EV vehicles until we have 12 months operations under my belt.

We'll see how this goes.
 
Very interesting how quickly things can change beech.

I think our lives are going to be very different a year or two from now, hopefully for the better and maybe a bit more flexible in terms of work etc.
 
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