ElectricMotorcycleForum.com
Makes And Models => Brammo Forum => Topic started by: BrammoBrian on April 03, 2014, 09:30:18 PM
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Here is the press release regarding the new lease program that will be available in the dealers for 2014 model year Empulse and Empulse R bikes:
Pioneering Motorcycle Lease Program Announced by Brammo
http://brammoinc.createsend1.com/t/ViewEmail/r/87BA2D9A3A232CD82540EF23F30FEDED/BC1AEB86F6BE429C6A4D01E12DB8921D (http://brammoinc.createsend1.com/t/ViewEmail/r/87BA2D9A3A232CD82540EF23F30FEDED/BC1AEB86F6BE429C6A4D01E12DB8921D)
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Is this also available in Canada?
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'Open-End Lease'
"Since the lessee must purchase the leased asset upon lease expiration, that person bears the risk that the asset depreciates more than was expected by the end of the lease. Of course, at the same time, the lessee stands to realize a gain if the asset depreciates less than expected.
For example, suppose your lease payments are based on the assumption that a $20,000 new car will be worth only $10,000 at the end of your lease agreement. If the car turns out to be worth only $4,000, you must compensate the lessor (the company who leased the car to you) for the lost $6,000 since your lease payment was calculated on the basis of the car having a salvage value of $10,000. Basically, since you are buying the car, you must bear the loss of that extra depreciation. Conversely, if the car is worth more than $10,000 at the end of the lease, you receive a refund from the lessor." Investopedia
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bigd,
The lessee has no responsibility to cover the residual value of the bike nor purchase it at the end of the lease. You have the option to purchase if you would like. Brammo is backing the residual with the bank, so the customer does not need to worry about this. There's no "gotcha" on this one.
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BrammoBrian,
What if the Government subsidy (tax rebate) becomes available again? Who gets the $$?
Thanks,
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Brian,
I think what bigd was getting at is that the published letter contains the words "open-end lease" which do mean that the lessee is responsible for residual value. They appear in a paragraph of "qualifier" statements about the lease some of which are sentence fragments (including the "sentence" that contains those words) so it's not clear how they relate to the lease described above.
It may be that the words "open-end lease" are a mistake. Or that particular statement may be trying to say "we also offer an open-end lease as an option for Preferred credit customers". But, the words are there, they do mean that the lessee is responsible for residual value, and the grammar surrounding that particular sentence is vague as to what it is trying to communicate...
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BrammoBrian,
What if the Government subsidy (tax rebate) becomes available again? Who gets the $$?
Thanks,
I'll take a look into this one, but I know that I was eligible to receive the full $7500 tax rebate on my Chevy Volt in 2012 even though the vehicle is leased.
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The federal car rebates are rolled into the lease in entirety. That's how Nissan is able to offer a $2000 down $200/mo lease for their base S LEAF (MSRP $28k).
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BrammoBrian: Thank you for participating in the forum. Your presence here and explanation about why design ideas were adopted (chain and gearbox) really makes sense and makes me appreciate Brammo more. This is a better forum when Brammo is represented and more voices are at the table. I ride an older Zero right now but I am an electric motorcycle fan and want ALL companies producing electric motorcycles, all electric vehicles for that matter, to succeed.
Now, back to the lease thread: I recently read an article about electric car lease rates for a three year term. It listed almost all of the current models and If I recall correctly: Smart for two, Chevy Spark, Leaf and several others were all $199 or less per month and many had zero money down. Honda was $239 per month with about $2000 down but it paid your insurance and other fees AND Honda would install a level 2 charger in your home...making you want to keep the car, I suppose. I know all these cars take into account the federal rebate but we are still talking about $22,000-$30,000 cars after deducting the $7500. In my opinion (and since I am seriously considering upgrading to a new bike now I guess I have the floor) the lease asking price of 13% down and $269 per month (48 month for the Empulse) is very steep. Yes, I do realize depreciation in value for motorcycles is greater than cars and is a factor in the lease rate.
I have never leased a vehicle and would be reluctant to do so. Even though our household income is in the 90th percentile I always finance when I buy and I won't buy unless the financing is super-sweet, usually 0%. What would be more appealing to me, as a potential customer, right now, would be 15% down and zero interest for a 48 month term. The payments would be the same as the lease rate: I would not have to give the bike back, Brammo would not have to sell the used inventory and Brammo could move inventory today. Throwing in a free charger would sweeten the deal enough for me to pick up a pen and sign on the dotted line.
Thank you,
Oregonrider 89
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BrammoBrian: Thank you for participating in the forum. Your presence here and explanation about why design ideas were adopted (chain and gearbox) really makes sense and makes me appreciate Brammo more. This is a better forum when Brammo is represented and more voices are at the table. I ride an older Zero right now but I am an electric motorcycle fan and want ALL companies producing electric motorcycles, all electric vehicles for that matter, to succeed.
Now, back to the lease thread: I recently read an article about electric car lease rates for a three year term. It listed almost all of the current models and If I recall correctly: Smart for two, Chevy Spark, Leaf and several others were all $199 or less per month and many had zero money down. Honda was $239 per month with about $2000 down but it paid your insurance and other fees AND Honda would install a level 2 charger in your home...making you want to keep the car, I suppose. I know all these cars take into account the federal rebate but we are still talking about $22,000-$30,000 cars after deducting the $7500. In my opinion (and since I am seriously considering upgrading to a new bike now I guess I have the floor) the lease asking price of 13% down and $269 per month (48 month for the Empulse) is very steep. Yes, I do realize depreciation in value for motorcycles is greater than cars and is a factor in the lease rate.
I have never leased a vehicle and would be reluctant to do so. Even though our household income is in the 90th percentile I always finance when I buy and I won't buy unless the financing is super-sweet, usually 0%. What would be more appealing to me, as a potential customer, right now, would be 15% down and zero interest for a 48 month term. The payments would be the same as the lease rate: I would not have to give the bike back, Brammo would not have to sell the used inventory and Brammo could move inventory today. Throwing in a free charger would sweeten the deal enough for me to pick up a pen and sign on the dotted line.
Thank you,
Oregonrider 89
I don't always have time to participate on the forums, but it is something I enjoy to do. Keep in mind that I am also an owner of 2 electric motorcycles, so participate as an enthusiast as well as someone in the industry.
I think the lease rates provided by the Automotive companies are not a fair comparison as they are mostly likely highly subsidized by the car companies and achieve much higher volumes and movements of capital than a lease for a motorcycle. I'm no expert on how all of these financial services work, however. So... All I can offer is what I know. The lease provides a way for someone to get a bike at a more affordable monthly rate than traditional financing, which is also available for the bikes. The traditional downfalls of leasing are still there, but so are the upsides. If it doesn't work for you, then don't do it. To be honest, it costs Brammo a lot more money for you to lease than buy, so we'd prefer to see more customers purchase outright or with traditional financing. We provide customer financing through the same institution that provides it for Polaris Industries' products, Sheffield Financing.
We provide a level 1 EVSE home charge cordset free with the bike. The bike is compatible with all public charging stations and I do not believe most customers require a Level 2 charger for their home as they just recharge overnight (for which the L1 EVSE is sufficient).
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Brian,
I think what bigd was getting at is that the published letter contains the words "open-end lease" which do mean that the lessee is responsible for residual value. They appear in a paragraph of "qualifier" statements about the lease some of which are sentence fragments (including the "sentence" that contains those words) so it's not clear how they relate to the lease described above.
It may be that the words "open-end lease" are a mistake. Or that particular statement may be trying to say "we also offer an open-end lease as an option for Preferred credit customers". But, the words are there, they do mean that the lessee is responsible for residual value, and the grammar surrounding that particular sentence is vague as to what it is trying to communicate...
This was double-checked with the leasing company and they have admitted that it was a mistake to include the description of the lease as an "open-end lease". We will be updating the lease details on our website and all digital and printed materials to make the correction. Again - the lessor has NO responsibility for the residual value of the vehicle. They do have the option to purchase at the end of the lease or return it to the dealer.
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Any information on what the purchase price would be at end of lease?
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Any information on what the purchase price would be at end of lease?
The residual value at the end of the lease would depend on the down payment provided by the customer and the term of the lease.
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Brian, what would be the payoff on a Empulse R? please let me know for both 36 and 48 months. Thank you