Consumer IQ

Is the $1-a-Day Electric Car Too Good to Be True?

The Top Fuel Efficient Cars for 2013

If you’re interested in getting an electric car on the super cheap, pay close attention: Falling prices for fully-electric cars are combining with certain state incentives to create incredible deals on leases.

This means renting an electric car could cost you less than $5 day, and if you already own a vehicle, adding an electric one into the mix could cost as little as an incremental $1/day.

That’s an incredible bargain, because AAA estimates that the average cost to own a 2013 sedan is about $24.99-a-day.

Bear with me as I detail my methods and calculations – they’ll hopefully demonstrate how you can take advantage of these ridiculously great deals.

How it Works

Let’s say you wanted to lease the fully-electric 2013 Nissan Leaf’s basic model at the standard 24 month, 12,000-mile terms.

You’d pay about $290-per-month for the term of the lease (sales taxes are built into the monthly payment).

There’d also be $56 in fees at the beginning and a $395 disposition fee at the end if you don’t lease another Nissan.

Thus, after the disposition fee, you’d pay $7,411 over two years for your car—or about $10.15-a-day.

My local Nissan representative says it costs about $1.00 to fully charge the battery, so I calculate that it would cost around $11.15-a-day to lease a Leaf (prior to insurance costs).

That’s already less than half of the daily ownership cost of a 2013 sedan.

But it gets better.

Maintenance costs for two years would also be close to nothing, because the car does not use an internal combustion engine, gasoline or motor oil.

Next, consider incentives.

Leased vehicles don’t qualify for the $7,500 federal tax credit for electric drive vehicles, but here in Georgia, I can take full advantage of a $5,000 state income tax credit available for the lease or purchase of a zero-emissions vehicle.

(Search for incentives in your state here.)

This credit can knock up to $6.85-a-day from the lease, so Georgia has turned my $11.15-a-day car into a $4.30-a-day car.

So, I’m getting an electric car for less than a fifth of the daily ownership cost of a new car. I didn’t even factor in how much I’d save over a traditional vehicle by not having to buy gas.

The $1/Day Second Car

The Leaf can get even cheaper if you own another vehicle.

I drive a Volvo C70, which AOL Autos says costs $25.54-a-day brand-new, assuming I drive about 10,000 miles-per-year. Their cost assumptions include about $3.91-a-day in insurance.

Now, this is where the math gets a bit difficult:

I actually pay about $4.80-a-day in insurance with a $500 deductible.

If I use the Leaf for most of my daily city driving and work commute, I can dramatically reduce how many miles I drive the Volvo.

My insurer has told me that if I adjusted my Volvo’s annual mileage estimate down to 1,000 miles, I could reduce my insurance payments to about $2.73-a-day for the Volvo and $3.06-a-day for the Leaf, with a $1,000 deductible on each.

Those changes mean that the Leaf could add only $0.99-a-day to my insurance costs and help bring the daily cost to own a Volvo to about $23.47-a-day.

Now, account for fuel.

Since I cut my annual mile assumption for the Volvo by 90%, I will also cut my gas consumption by a similar amount.

That means I’ve reduced $3.78-a-day from the daily cost-to-own, which is now $19.69.

Basically, these insurance and fuel reductions have cut the daily cost-to-own of my first car by $5.85 by adding a second vehicle that costs $7.36-a-day.

Netting those together, it turns out that I get to use a fully electric car for the cost of about $1.51-a-day.

And if I decide to lease another Leaf at the end, the lack of a disposition fee would put the final daily cost at $0.97.

Sure, the math is a little complicated, but in my mind, that’s practically a free car—and a no-brainer for everyone from earth-lovers to penny-pinchers.

Janet Al-Saad is the founder of the Five Ten Twenty Club, a website designed to help you improve your finances $5, $10 or $20 at a time.