My Nissan Leaf life: How an electric car hit my budget

– Fourth installment in an occasional series

A key step before you buy a new plug-in electric-drive vehicle is to examine your finances in detail. You may just love helping the planet, but it clearly helps to be able to justify higher upfront costs with the promise of lower fuel costs down the road and square that with the reality of what's in your wallet. A deadline helps, too.

By last November I had hatched a plan that would give our 1998 Honda Accord to our daughter for Christmas. She could take it off to college in January. That would leave my wife and I with only our eight-year-old Honda Odyssey. It's a good van, but at about 20 miles per gallon city, 26 m.p.g. on the highway, it’s hardly a mileage champ.

Having done our field research, it was clear that the only electric-drive models that would actually be available in early 2012 were the plug-in hybrid Chevy Volt and the all-electric Nissan Leaf.

From the start, we had leaned toward the Chevy Volt. Our premise: Owning a plug-in hybrid meant you could reasonable have just one vehicle in the garage, drive on electric most of the time, still go on long trips, and save money over having two cars. But that premise was about to get a fiscal reality check.

I grabbed my file folder with snippets of cost data on both vehicles and finally sat down at the kitchen table one Saturday with a pad of paper. I soon calculated that if we sold the van, took that cash and made a big down payment on a Volt ($39,995), it would mean a monthly car loan payment of around $450 if purchased (after $7,500 rebate) or about $350 on a 36-month lease. In addition, I also discovered, to my surprise, that the car insurance on the Volt would be about $1,600 a year ($133 a month). The electricity for the Volt would cost only about $30 a month and gas would be maybe $10. So the Volt lease option would cost about $523, less $100 saved on fuel – or a net monthly cost to operate of about $423.

By comparison, owning a Nissan Leaf would mean either renting or keeping the van for long trips. It was the car insurance question that turned on the light bulb. The Leaf would cost just $900 a year to insure. The van was $600 a year to insure. So combined they would still be a bit cheaper to insure than a Volt alone. The van was paid for. So I began to contemplate keeping the van for long trips and to Home Depot for things that just wouldn't fit in a car. And having a second vehicle would give us more flexibility if my wife and I had separate places to go.

Leaf fuel costs would be about $36 a month for electricity. The lease payment on the higher-end model with fast charger ($37,250) would be about $420. Total cost to operate a Leaf (and seldom-used van) would be about $420 lease plus $125 insurance for the pair, plus $36 for fuel, totaling about $581 a month. But I would save about $105 per month on gasoline I didn't have to buy – dropping the net cost of driving to around $476 per month.

So the Volt was a $53 cheaper option per month. But the Leaf gave us an extra car to use when we needed it. Another important factor for us was how much extra would we be paying per month?

The Leaf-van combo would add a net of about $426 to the household monthly budget (subtracting $50 per month van insurance already part of the budget). And I still had a trump card to play. We had just refinanced the house. So I figured we would prioritize some savings from our suddenly lower mortgage and use that instead toward transportation. That way, all in all, I figured leasing a Volt would mean coming up with about $163 more per month – or reducing costs elsewhere by that amount – versus about $166 per month for the Leaf-van option.

That wasn't a big difference, and the Leaf let us keep a two-car option for convenience. Yes, the Leaf would still boost out household expenses significantly. But we could eat out once a week instead of twice – right honey? She agreed.

So, we jumped onto the Nissan Leaf website. Would Nissan accept us as candidates for the at-that-time still slim supply of Leafs they were doling out? We would find out.