Turning over a New Leaf (part 2)

Part 2: 
The New Car

Our new Leaf SV. Black and white coloring, not unlike a space shuttle.

When deciding how to replace our beloved blue 2014 Leaf, we considered several options, with the constraint that we would definitely be replacing it with another 100% electric vehicle. "No plug, no chug" is our mentality, as we are committed to plug-in vehicles from here on out for the benefit of the global environment our kids will inherit (i.e., far less induced greenhouse gas emissions over the lifetime of the vehicle), for the benefit of improved local air quality (i.e., no smog-producing tailpipe emissions), and for the financial benefits of "free" fuel from our over-producing solar panels as well as reduced maintenance costs compared to gasoline vehicles. At some point we will be replacing our 13-year old SUV, and for that we'll want a larger vehicle that can better accommodate our soon-to-be-5-member family on long road trips. For that we'll relax the 100% electric constraint, but still try for a plug-in hybrid vehicle that would allow us to at least make our commutes 100% electric. (I'm looking hard at the Chrysler Pacifica Hybrid mini-van with 30 miles all-electric range). If that van had been available today, we probably would have gone ahead and purchased that, relying on our old SUV for a while until we were ready to replace it with a smaller 100% electric commuter vehicle. But the Pacifica Hybrid is still a month or two out from being available, and meanwhile we needed a car.

As for our Leaf replacement, we knew it would be primarily my commute vehicle (~22 miles each way, 44 miles round trip per day), but that it would need to have the capability of carrying all 5 members of our family if necessary. This meant we eliminated the smaller EVs (Fiat 500e, Chevy Spark) based on size, and we eliminated a lease option since I've been averaging just over 16k miles per year on the Leaf and lease deals start to look less attractive when you have to pay for more than the typical 10k - 12k mileage allowance. Also, in the interest of reducing demand for building new cars, and the environmental impact of manufacturing new cars, my goal for this replacement car (as it was for the blue Leaf) is to keep driving the car until its wheels fall off. Hopefully it will be my son's first car when he is old enough to drive in 10 years.

At first I looked at the idea of  replacing our 2014 Leaf with another used 2014 Leaf. Edmunds and Autotrader had listings between $11,500 and $12,000 before sales tax, pushing it to ~$14,000 including sales tax, and effectively more given that we'd need to finance the car and would likely be unable to access 0% APR like we had on our Leaf when we bought it new. I wasn't clear on what the warranty status of each of these listed vehicles would be, either. So while this was a decent option in terms of cost, I wasn't sure if it was the best choice for us moving forward.

Given the major increases in EV range that are being deployed in the very near term (Chevy Bolt with 238 miles range within a couple months, likely 2017 Leaf with rumored ~160ish miles range within a couple months, Tesla Model 3 within a couple years), the idea of buying a vehicle now with the same 84 miles EPA range that was available 2.5 years ago seemed less than-ideal future-proofing. I don't want to upgrade my car every couple of years as the higher ranges become available, but I am interested in getting the best range per dollar available to me right now. I looked at used 2014 Toyota Rav4 EVs, which are listing for ~$22k before sales tax, so probably close to $24k with sales tax. But again, that's used, without a warranty, and for a vehicle that, from what I've heard, neither Toyota or Tesla are strongly motivated to continue servicing. Plus it would cost another $3.5k to have an after-market quick-charge port installed on that vehicle, and I have become convinced over the duration of my Leaf ownership that no one should own a low-range electric vehicle without the option to Quick Charge, which greatly extends the use cases of the car.

I ended up deciding to go for a new 2016 Nissan Leaf SV (one trim level higher than our totaled Leaf), for the primary reasons that a.) it would come with a 30 kWh battery, allowing for 27% more range than our previous Leaf (EPA estimated 107 miles vs. the previous 84 miles), and b.) would come with all the warranties of a new car, plus be available with 0% APR financing. Obviously, this still  involved spending more money, as the net cost to us (accounting for federal tax credit of $7500, state rebate of $2500, Nissan promotional discounts of $6000, sales tax, and gap insurance) would end up being about $20.5k. That's a good ~$5k+ more expensive than getting a used 2014 Leaf, but we decided that the benefits of having more range and a new car (warranty, 0% APR) made it a more sensible long-term purchase.

One might argue that we could have waited a couple months and gone all in for a 2017 Chevy Bolt with 238 miles of range. But that would have been an even greater cost, since the Bolt starts at $37,500, and once you add sales tax is up over $40k. I doubt there will be many dealer or Chevy incentives for this hot new vehicle right out of the gate, so you're looking at a net cost of over $30k after applying the federal tax credit and CA state rebate, which is ~$10k more expensive than what our net cost is on the 2016 Leaf. If this were going to be our only car, I could justify that premium for a Bolt. But given we are also planning on getting a Pacifica Hybrid when it comes out, and that vehicle will end up becoming our family long-hauler for road trips, I'd prefer to save the money for that.

After just a few days, the new Leaf is quite satisfying to drive. The extra range is real, and after living 2.5 years with a 84 mile car, its a bit surprising how much the extra 23ish miles of EPA range on the new Leaf relieves range anxiety. Our car came from a Goleta dealership, and it was driven the full drive to Woodland Hills without needing to stop and charge. (We've done the same trip in our old Leaf, and definitely needed a quick charge along the way.) I believe we could drive it to San Diego with only a single stop to quick-charge (a trip that would take 2-3 stops in the 24 kWh Leaf. Work-to-home commutes from Santa Monica to Woodland Hills that used to take 29% of the old battery only take 17% of the new one. The "guess-o-meter" remains as variable as ever, but it's nice to drive it from home to work without it's estimate ever dropping below 100 miles remaining. On my tuesday drives down to Long Beach, I used to have to charge the old Leaf to make sure I had enough juice to get back home. I expect I won't need to do that anymore, saving the cost of charging (50 cents/kWh), and leaving the charging space open for some other plugin driver to use.

The guess-o-meter reads 121 miles of predicted range when the car is fully charged after having driven from Santa Monica up over the mountains and down into Woodland Hills.

Guess-o-meter reads 144 miles of range when fully charged, after having driven from Woodland Hills up over the mountains and down to the sea-level Santa Monica.

Plus, stepping up to the SV trim from the low-end S trim brought some extra perks in addition to the bigger battery, including the ability to "pre-condition" the car by starting the heater or AC from my smart phone, so the car is a comfortable temperature before we get into it. Not critical in Southern CA with our mild weather, but I foresee it being a nice-to-have when taking the kiddos to school on cold winter mornings.

Turning over a new Leaf

Summary:

Our beloved first electric car, a blue 2014 Nissan Leaf (S trim, with the Charge package and a 24 kWh battery), has been "totaled" in an accident.

We have replaced it with a white 2016 Nissan Leaf (SV trim, with a bigger 30 kWh) battery.

This transition has led to some "lessons learned" about the process of being in an accident in which you are not at fault, dealing with insurance, the subtleties of electric car depreciation and some observations on the impact of larger battery capacity on life with an EV.

This first post is about the accident and it's insurance-related aftermath.
The second post is about choosing a replacement electric vehicle.

The Accident:

Around noon on Tuesday, Sep 20, I was driving alone, southbound on I-405 in the #1 lane (not the carpool lane, but the "fast" lane), just south of National Blvd, at a speed of probably about 50 mph, when the vehicles in front of me slowed to an abrupt stop. I was able to come to a stop with a few feet to spare, and no screeching tires. In my rearview mirror I could see the vehicle behind me (a Lincoln) was attempting to slow to a stop, but was hit, hard, from behind by the vehicle behind him (a white SUV). This pushed the Lincoln into the back of my Leaf, and my Leaf into the back of the pickup truck in front of me.  So, at least 4 cars involved: 1. The pickup truck in front of me, which was only hit from behind. 2. My Leaf, which was hit from behind and pushed into the truck. 3. The Lincoln behind me, which was hit from behind and pushed into me. and 4. The white SUV that hit the lincoln. I don't know if that SUV was hit from behind as well, or whether it was the main at-fault source of the accident.

The pickup truck in front of me sustained what looked like relatively minor damage to its bumper, and the vehicle 2 cars behind me (the one that hit the Lincoln from behind), a white SUV, also seemed to have only minor damage on its front bumper. Both the Lincoln and my Leaf sustained major damage on the front and back (we were both "sandwiched"), and I think the Lincoln probably got the worst of it, since the driver was clearly in some sort of shock after he stepped out of his vehicle, leaning on his wrecked car for support and grabbing at his neck and back in pain. He was only giving incoherent, stuttering responses to questions, though he seemed cognizant of his surroundings and was able to walk around and follow directions. No one else showed any signs of injury or shock.

I had called 911 before even getting out of my car, and a CHP officer in a cruiser showed up within 2 minutes. He stopped traffic across all lanes of the freeway, and had each driver move their car over to the right shoulder. He tasked me to drive both my own car and the Lincoln, since the Lincoln driver did not appear to be in a confident state to drive his vehicle. Within 6 minutes of the accident occurring, all 4 vehicles involved were on the right shoulder and traffic on the 405 south was moving again. (I know this by comparing the timestamps of photos I took immediately after the accident, and then again when all our cars were on the right shoulder.) Another CHP officer showed up and took statements from each driver regarding what had happened, and gave me his officer ID number so I could later retrieve the CHP report (which would take "8 business days" to become available). An ambulance picked up the driver of the Lincoln, and a tow truck took me and the beleaguered Blue Leaf to a collision auto-body shop in Reseda, about 2 miles from my house. I came away impressed with the efficiency of the California Highway Patrol, and as we were leaving the scene the tow truck driver was telling me that he and others had heard a call of another major accident on the northbound side of the freeway, not too far from ours. The driver said some days he only responds to 1 or 2 accidents on the West side of Los Angeles, and other days it's 10.

Insurance when not at-fault:

My wife and I had some incorrect assumptions about how car insurance works in the case of an accident that is not your fault. We assumed that it would be the responsibility of the at-fault party's insurance to "make us whole" for the damage caused in the accident. This is not quite true. Since our car was "totaled" (meaning our insurance company assessed that it would cost more money to have it repaired than the actual market value (AMV) of the vehicle), the insurance companies would only be responsible for paying the AMV to the title holder. But who was at fault would not be determined until the CHP report was available and all insurance companies had reviewed it, a process that would take at least 30 days. So, we started a claim on our own insurance so we could get a rental car for a while and then a replacement vehicle. After we get our settlement from our insurance company, they will then seek reimbursement by filing a claim against the at-fault party's insurance company.

When we bought the Leaf in April of 2014, we put $5k down and spread the rest of the cost over a 72 month 0% APR loan. By this time we still owed $13.9k on the loan, however the AMV of the Leaf was determined to be ~$10,700 ($11.7k including sales tax). This meant that our insurance company would pay a $11.7k settlement (minus our deductible of $300) to the title holder (Nissan), we would lose the car, and we would still be responsible for paying Nissan the remaining $2.2k on the loan, which they would need us to pay quickly so that they could transfer the car's title to our insurance company. Basically, the benefit of the insurance was them agreeing to "buy" the totaled car from us for the actual market value it had just before the accident, even though it was wrecked. The downside was this AMV was less than we owed to Nissan for the car. So we had to come up with the difference out of pocket.

Gap Insurance:

Again, because of an accident that was no fault of our own, we lost our car and still had to pay $2,200 for the car we no longer had. After getting over the surprise of this situation, we realized it actually made sense: The at-fault party had no control over the way we chose to pay for our car, and therefore the amount of debt remaining we had on it, nor did they have any control over the rate at which our car depreciated over time. They are only responsible for the value of the property that was "totaled". The AMV of the car was determined based on what similar used cars of the same make, model, year, and mileage had been selling for recently (not the "Blue Book value"), and the fact that it was less than what we owed was a result of the depreciation of the car and the payment terms/duration we had set up when we bought it. The car's value, and what we owed on it, were two completely separate things.

The way we could have avoided this situation was to purchase "gap insurance", also known as a "debt cancellation policy". Our insurance company (Wawanesa) doesn't offer this service; it is something you can purchase from the car loan holder (in our case, Nissan Motor Acceptance Corporation) at the time you are buying the new vehicle at the dealership. Neither my wife nor I remember being offered this option when we bought the car in 2014, but it turns out it is offered right at the time the dealership is trying to tack all sorts of other costs on to the deal (theft deterrent devices, window etching, "rust-proofing", "fabric protection", . . . and, oh yeah, gap insurance), so I guess we must have just dismissed it as yet another thing we wouldn't need and didn't want to pay for. Turns out that if we had purchased it (for ~$900), it would have meant that whatever remained on our loan balance after a total loss settlement would simply be forgiven. So, in our case, if we had spent an extra $900 at time of purchase, we could have saved $2200 in an accident like ours. Not knowing that this accident was going to occur, I'm still not sure I would have purchased the gap insurance even if I had understood its value at the time. Do you (definitely) pay an extra $900 so that you can (maybe) save a (net) $1300 in the case that your car is totaled? Or do you save the $900 and bet on the car not being totaled?

This being our lesson learned, we did purchase Gap insurance on the new vehicle we bought as our Leaf's replacement: (a new 2016 Leaf, more on how we decided on that car in part 2). Leafs, in particular, have pretty bad depreciation from original MSRP (likely the result of people's fears about battery degradation, as well as due to the federal tax credit and state rebates that deeply discount the actual cost compared to the MSRP in the first place), so I'd recommend anyone purchasing a new Leaf spring for the gap insurance.