[Bill J]

I am seriously thinking of canceling my XC 40 recharge pre-order.. I’d like to I have comment on my rationale for doing so. Of the lease-purchase options, I tend to favor the lease. My reasoning is that the XC 40 will depreciate dramatically and I don’t want to bear that risk which I would be doing by purchasing. The relativ mileage limitation, battery inefficiency and the original high price lead to this conclusion
On a lease, my local dealer quoted $870 per month for a three-year, 10,000 miles/year lease with $5000 down. Comparing this to a Tesla model Y, it’s about $12,000 more over three years. At this point I think I have talked myself into canceling my preorder purely based on price because I liked car very much when I drove it a couple of times. Again, I’d like input/thoughts from anyone so inclined.

 

[Billfan]

I am seriously thinking of canceling my XC 40 recharge pre-order.. I’d like to I have comment on my rationale for doing so. Of the lease-purchase options, I tend to favor the lease. My reasoning is that the XC 40 will depreciate dramatically and I don’t want to bear that risk which I would be doing by purchasing. The relativ mileage limitation, battery inefficiency and the original high price lead to this conclusion
On a lease, my local dealer quoted $870 per month for a three-year, 10,000 miles/year lease with $5000 down. Comparing this to a Tesla model Y, it’s about $12,000 more over three years. At this point I think I have talked myself into canceling my preorder purely based on price because I liked car very much when I drove it a couple of times. Again, I’d like input/thoughts from anyone so inclined.

Agreed, that's one of the reasons I cancelled mine too. unless you are planning on owning this vehicle for at least seven years it is not worth buying because the depreciation will be severe, particularly because this vehicle has very poor range and efficiency and other EVs will eclipse it dramatically over the next couple years, and in fact many others already do at the same price point. That is not a good deal for the lease so I would not go through with it. After canceling my order I purchased a Ford Mustang Mach-E from a local dealer who had one in stock from a pre-order cancellation. It is an excellent vehicle so I would recommend taking a look at those. It is a very worthy competitor to the Volvo in my opinion and far better build quality than the Model Y.

 

[arijaycomet]

Again, I’d like input/thoughts from anyone so inclined.

FIRST off let me say that YES I realize this thread above is 3 months old!
That said… I felt like it was worth replying for other users who might benefit —-

We are in Ohio (USA) and our sales tax is 8% for Cuyahoga County. We have negotiated:
39 month lease
15,000 miles per year
$900 per month (inclusive of 8% sales tax; ~$833 before tax)
Based on $1,100 down payment + first month due at signing (Net $2k out of pocket)

Typically adding miles is $0.25 to $0.30 per mile, and I assume your lease is 36 not 39 months? (Ours 39). That would be 15,000 extra miles or around $4500 more “value” in our lease. You were putting down $5000 and we only putting down $1000 so that is another $4000 savings. If we dropped to 10k miles per year or put down $4000 more it’d be apples to apples — but the bottom line is your quote sounds like it’s $8,500 off— it almost sounds to me like maybe someone forgot to plug in the tax credit?

Considering when your post was made, I have to wonder if the software was off, not including the $7,500 federal tax credit. Part of what makes leasing EVs attractive is that the tax credit works as a CAP reduction making most leases around $200 Per month more affordable than their non-EV counterparts (assuming the cars have the same MSRP/CAP price, and similar residual % and similar rates/money factors). So yeah… something seems VERY off for your quote.

Had we put the same $5000 down or another $3900 extra down that would have saved us another $100/mo making our payment $800. And had we dropped from 15k/yr to 10k/yr I’d expect another savings of $100-125/mo making our payment closer to $700/mo. Your price seems skewed strangely, and might be worth revisiting if you’re still in the market. Cheers!

 

[westmo]

AFAIK, Volvo just began the full 7500 tax credit allowance in leases starting in May. Previously it was 3,500.

 

[ColoradoNative]

AFAIK, Volvo just began the full 7500 tax credit allowance in leases starting in May. Previously it was 3,500.

Yes, but... they also changed the money factor, so it's no where as good a deal as it sounds. (FWIW, I was told this by the Sales Manager, who didn't share the actual number.)

 

[He Keith]

I just got a lease quote with $11K off list. $7500 Volvo cash, then $500 for being a Penfed customer and then $3K dealer discount. Money factor sucks at 5.6%, but with my trade having $2500 in equity right now a 10K mile/yr lease is down to $760 a month. Now I am getting interested, then toss it back to them in 3 years. We were thinking of buying it, but as mentioned I think this car becomes a paper weight in 3 years due to range and inefficiencies. That way I can charge the battery to 1005 and not worry. In 3 years EVs will be everywhere and my wife can do what she wants then and buy the next one. Offly a comparable gas XC40 T5 in now only about $6K less.

 

[Homer]

Assuming 59,000 list, minus all trade in incentives...leaves $48,000.
Payment on lease is $27,360. Car is depreciated to 43% of new value purchase price.
Most 3 year old Volvos retain 65% of value.
Tossing it back to Volvo is not harming Volvo.

 

[ColoradoNative]

It amazes me that dealer discounts are being offered. Here in Denver they are grudgingly accepting the MSRP that was quoted for the order. I'm led to believe there are no shortage of buyers.

 

[arijaycomet]

Our dealer in Ohio has a demo car but all inventory is mostly sold. We lucked into one extra allocation coming in soon but most cars sold with slow inventory. Once supply picks up suspect discounts may occur. We are also stuck at msrp here FYI

 

[He Keith]

Assuming 59,000 list, minus all trade in incentives...leaves $48,000.
Payment on lease is $27,360. Car is depreciated to 43% of new value purchase price.
Most 3 year old Volvos retain 65% of value.
Tossing it back to Volvo is not harming Volvo.

Actually car was $60k and change with incentives making it around $$49k with a residual of $32K. The issue is the money factor is 5.6% and rental fees wind up making Volvo making back chunks of those incentives back. Wife was ready to leave, because she wanted to bug it and it told her if she leases it expect to return it end of lease and there will be far better EV options but then, so she said f-it and is getting a gas version T5 R-design

 

[He Keith]

It amazes me that dealer discounts are being offered. Here in Denver they are grudgingly accepting the MSRP that was quoted for the order. I'm led to believe there are no shortage of buyers.

Lucky for me I live in GA and EV adoption here sucks and every Volvo dealer in town has several Recharges.

 

[Bill J]

FIRST off let me say that YES I realize this thread above is 3 months old!
That said… I felt like it was worth replying for other users who might benefit —-

We are in Ohio (USA) and our sales tax is 8% for Cuyahoga County. We have negotiated:
39 month lease
15,000 miles per year
$900 per month (inclusive of 8% sales tax; ~$833 before tax)
Based on $1,100 down payment + first month due at signing (Net $2k out of pocket)

Typically adding miles is $0.25 to $0.30 per mile, and I assume your lease is 36 not 39 months? (Ours 39). That would be 15,000 extra miles or around $4500 more “value” in our lease. You were putting down $5000 and we only putting down $1000 so that is another $4000 savings. If we dropped to 10k miles per year or put down $4000 more it’d be apples to apples — but the bottom line is your quote sounds like it’s $8,500 off— it almost sounds to me like maybe someone forgot to plug in the tax credit?

Considering when your post was made, I have to wonder if the software was off, not including the $7,500 federal tax credit. Part of what makes leasing EVs attractive is that the tax credit works as a CAP reduction making most leases around $200 Per month more affordable than their non-EV counterparts (assuming the cars have the same MSRP/CAP price, and similar residual % and similar rates/money factors). So yeah… something seems VERY off for your quote.

Had we put the same $5000 down or another $3900 extra down that would have saved us another $100/mo making our payment $800. And had we dropped from 15k/yr to 10k/yr I’d expect another savings of $100-125/mo making our payment closer to $700/mo. Your price seems skewed strangely, and might be worth revisiting if you’re still in the market. Cheers!

 

[Bill J]

Thank you for your follow up. Your information and other replies to your post have me going back to the dealer for a requote.

 

[He Keith]

Since Volvo is leasing the car not sure how practical it is to try dealers further away. Back in 2009 I wanted a certain Acura that was 5 hours away in TN. I did the deal over the phone and we met half way, did all the paperwork and I drove home. The only hassle there was I had to do the DMV work myself. In the end it was clean deal as I got the car I wanted and Acura Financial was the same regardless of where I did the deal. Now states with big sales taxes on a lease may be an issue as you may not be able to wrap that in the lease then. Here in GA they made big changes to the taxes so not sure I could do that easily now.

 

[ColoradoNative]

FWIW: According to Edmonds, the Volvo Car Financial Services Lease MF for May 2021 is 0.00193, or 4.6% APR. However, every dealer has the option to tack on as much as 0.00125, although most will add less. My dealer is adding 0.0005, for an actual lease rate of 0.00243, or 5.832% APR. This is one area where shopping dealers might help.

 

[westmo]

FWIW: According to Edmonds, the Volvo Car Financial Services Lease MF for May 2021 is 0.00193, or 4.6% APR.

Yep, this checks out.

In April, my deal was 4,000 off MSRP (3,500 for tax credit, 500 for ?) at a MF of 0.0017 (4.08%). The dealer also discounted the $350 turn-in fee. But car was still at port by end of April (heat pump/AC issue).

In May it changed to 8,000 off MSRP (7,500 for tax credit + 500) at a MF of 0.00193 (4.63%). However, they honored the prior 4.08% MF (saving me $630), but did not discount the $350 turn in fee.

 

[ColoradoNative]

In May it changed to 8,000 off MSPR (7,500 for tax credit + 500) at a MF of 0.00193 (4.63%). However, they honored the prior 4.08% MF (saving me $630), but did not discount the $350 turn in fee.

Sweet - that is the best of both worlds. If you run the math, the difference between last month's lease deal and this month's lease deal is about $2 a month, despite the Incentive going from $3500 to $7500. The rate change basically wipes out the difference.

 

[Mac Man]

I agree on leasing for the reasons above. I did a 3 year lease at 10,000 miles a year. Got a great deal on the lease.

 

[He Keith]

My wife opted for the gas XC40 as rename anxiety for the better of her, even though she rarely drives over 100 miles in one day. I want the P8, but drive so little it is not worth the cost to me.