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Author Topic: Could leasing boost Zero's sales?  (Read 1724 times)

MostlyBonkers

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Could leasing boost Zero's sales?
« on: August 05, 2016, 03:12:06 AM »

I've just leased a Kia Soul EV through Drive Electric  (http://www.drive-electric.co.uk/). It's an arm of Fleetdrive, a vehicle leasing company that has been around for 22 years.

The experience has made me think it could help a lot of people get on a Zero that otherwise wouldn't consider it for financial reasons.  Leasing is already proving an effective method of enabling people to drive electric cars, so why not bikes?

Bearing in mind you get a new vehicle when leasing, the rates seem really good. I've always thought you're paying for the depreciation with these deals.  There is an element of that for sure, but
I also think there are some efficiencies  going on when it comes to leasing, which helps make it more financially viable. The owner is the leasing company who can reclaim the VAT (sales tax). Therefore the vehicle only costs the company 10,000 instead of the 12,000 that it would cost a private buyer. The monthly lease cost will have VAT, but a much lower amount over the two or three year lease compared to the full purchase.

I also think that leasing companies manage to strike better deals with manufacturers than individuals and some of this saving helps keep the lease rates down.

How would you feel about leasing your next bike?

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Richard230

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Re: Could leasing boost Zero's sales?
« Reply #1 on: August 05, 2016, 03:39:54 AM »

I can understand why leasing would make sense, but here in the U.S. for some reason, leasing a motorcycle is not something that I have ever heard of.  My BMW dealer has said for years that they would like to lease BMW motorcycles, but there is no such program available from BMWNA, although they do aggressively promote financing their motorcycles through BMW's U.S. financing company.

I have never heard of any other motorcycle brand being sold in the U.S. leasing their motorcycles either, so there must be something going on with the leasing market.  I can only assume that the companies that lease vehicles are not interested in doing so for motorcycles for some financial or legal reason.   

Another idea that my dealer would like to see is the first three years of dealer maintenance being sold, and financed, as part of the initial price of the motorcycle.  But that also, is not something that seems to be of interest to our motorcycle importers, although when my daughter bought her Subaru, she was able to finance pre-paid dealer servicing for the length of the car's warranty.
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Richard's motorcycle collection:  2018 16.6 kWh Zero S, 2020 KTM 390 Duke, 2002 Yamaha FZ1 (FZS1000N) and a 1978 Honda Kick 'N Go Senior.

domingo3

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Re: Could leasing boost Zero's sales?
« Reply #2 on: August 05, 2016, 07:51:50 AM »

Since my work involves moving every 3 years or so, it's uncertain if what I bought last week will fit my commute 3 years from now, making a lease option very attractive.  Since electric motorcycle tech is evolving even more rapidly than electric cars, the resale value is even more uncertain.  In the end, I decided that YOLO (you only live once) and I had the means, so I took the plunge.  I'm not sure how big of a target you'd hit with the lease option, though.
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mrwilsn

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Re: Could leasing boost Zero's sales?
« Reply #3 on: August 05, 2016, 09:41:28 AM »

Resale value of the Zero gets mentioned a lot on this forum.  It's true that the resale value is low.  Actually, they are way under valued because the market currently doesn't understand the difference between an ICE that's 3-5 years old and an EV that's 3-5 years old.

The drive train just doesn't age on an electric vehicle they way it does on an ICE.  A used EV motorcycle with a fresh battery is essentially good as new (power train, not counting shocks, tires, brakes, paint etc.).  However, an EV motorcycle that is 3-5 years old isn't likely to NEED a new battery although the new owner might WANT one because of the technology progression in the 3-5 year time period.  A brand new battery with technology that is 3-5 years newer is likely going to give a much better range and won't cost as much as the original battery due to falling prices.

But that 'old' battery isn't ready to kick the bucket just yet!  Far from it actually! While you might not want to use it anymore on your motorcycle the value of the 'old' battery is much higher than the market realizes.  Number one use case....turn it into a 'powerwall'.  A Tesla power wall will set you back $3500 for 10kWh.  A Zero 4 brick monolith is going to provide 10kWh+ depending on year.  Assuming the battery is at 80% capacity in 3-5 years then that's still 8kWh available for home energy storage.  Of course you will need some extra electronics to make it work as a powerwall but it's very doable.  And you don't need to have solar panels in order to make use of it.  You could charge up at night when rates are low and then use the battery during the day when rates are higher.  And when grid power goes down you will have have a battery back up!

Since it's unlikely that most people would go through the trouble to do this themselves...rather than a lease option, I would like see Zero adopt a battery upgrade program.  Allow owners to trade in the old battery for a reasonable price and then Zero collects the old batteries and gives them a second life.  Nissan planned to do something similar from day 1 with leaf batteries (they don't offer upgrades that I am aware of...they just planned to collect batteries that get swapped after hitting the 80% capacity mark...mostly under warranty I think) but they are only just now actually making good on the plan because the batteries are lasting much longer than expected.  If Zero adopted an upgrade program and let any owner take advantage of it, not just the original owner, then it would significantly increase the resale value since you could either upgrade before selling or use the upgrade program as a selling point to potential buyers.  Seems it would boost sales too since people wouldn't be so concerned about the battery life and the possibility that new tech is just around the corner.
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NEW2elec

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Re: Could leasing boost Zero's sales?
« Reply #4 on: August 05, 2016, 10:07:20 AM »

Good points and ideas  (as always) Mrwilson.  I would like to see, if not an upgrade battery program a "certified" used program or be able to purchase a two year warranty on a used bike.
I don't know if leasing, no matter how good it would be for the customer, would work for  a bike company.  It is unreal how mush people want to customize their bikes and pay through the nose for it.  You'd have to leave it stock.  I'd say "a lot" of people would love to walk away from what was an emotional buy after three years.  You see a ton of bikes for sale with a few hundred miles on them.  Sad truth is bikes and boats sale on image and dreams of a lot of people who don't really know what they want.
I love mine but I have plenty of toys that lost their luster.
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mrwilsn

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Re: Could leasing boost Zero's sales?
« Reply #5 on: August 05, 2016, 02:44:51 PM »

Good points and ideas  (as always) Mrwilson.  I would like to see, if not an upgrade battery program a "certified" used program or be able to purchase a two year warranty on a used bike.
I don't know if leasing, no matter how good it would be for the customer, would work for  a bike company.  It is unreal how mush people want to customize their bikes and pay through the nose for it.  You'd have to leave it stock.  I'd say "a lot" of people would love to walk away from what was an emotional buy after three years.  You see a ton of bikes for sale with a few hundred miles on them.  Sad truth is bikes and boats sale on image and dreams of a lot of people who don't really know what they want.
I love mine but I have plenty of toys that lost their luster.

Thanks @NEW2elec.  You actually reminded me of something else that I have been thinking about relative to resale value.  Zero plastics are REALLY cheap...especially compared to what you would pay from the big boys.  You can replace every piece of body work on a Zero S/DS/SR/DSR for about $250.  BAM! Stock luster renewed  ;D  I actually already have replacements for all the plastic on my 2014 Zero S.
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MrDude_1

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Re: Could leasing boost Zero's sales?
« Reply #6 on: August 05, 2016, 07:05:33 PM »

Resale value of the Zero gets mentioned a lot on this forum.  It's true that the resale value is low.  Actually, they are way under valued because the market currently doesn't understand the difference between an ICE that's 3-5 years old and an EV that's 3-5 years old.

The drive train just doesn't age on an electric vehicle they way it does on an ICE.  A used EV motorcycle with a fresh battery is essentially good as new (power train, not counting shocks, tires, brakes, paint etc.).  However, an EV motorcycle that is 3-5 years old isn't likely to NEED a new battery although the new owner might WANT one because of the technology progression in the 3-5 year time period.  A brand new battery with technology that is 3-5 years newer is likely going to give a much better range and won't cost as much as the original battery due to falling prices.

But that 'old' battery isn't ready to kick the bucket just yet!  Far from it actually! While you might not want to use it anymore on your motorcycle the value of the 'old' battery is much higher than the market realizes.  Number one use case....turn it into a 'powerwall'.  A Tesla power wall will set you back $3500 for 10kWh.  A Zero 4 brick monolith is going to provide 10kWh+ depending on year.  Assuming the battery is at 80% capacity in 3-5 years then that's still 8kWh available for home energy storage.  Of course you will need some extra electronics to make it work as a powerwall but it's very doable.  And you don't need to have solar panels in order to make use of it.  You could charge up at night when rates are low and then use the battery during the day when rates are higher.  And when grid power goes down you will have have a battery back up!

Since it's unlikely that most people would go through the trouble to do this themselves...rather than a lease option, I would like see Zero adopt a battery upgrade program.  Allow owners to trade in the old battery for a reasonable price and then Zero collects the old batteries and gives them a second life.  Nissan planned to do something similar from day 1 with leaf batteries (they don't offer upgrades that I am aware of...they just planned to collect batteries that get swapped after hitting the 80% capacity mark...mostly under warranty I think) but they are only just now actually making good on the plan because the batteries are lasting much longer than expected.  If Zero adopted an upgrade program and let any owner take advantage of it, not just the original owner, then it would significantly increase the resale value since you could either upgrade before selling or use the upgrade program as a selling point to potential buyers.  Seems it would boost sales too since people wouldn't be so concerned about the battery life and the possibility that new tech is just around the corner.

I think you highlighted the problem unintentionally there.
Sure the battery (if still good) makes a good power source, but you have to be an electrical engineer to take advantage of it.
To do your powerwall idea, you have to have a DC to AC inverter already wired up into the house.. unlikely unless you have solar. If you have solar its likely you have a net metering setup that cannot use a battery source...   and even if you manage to have all that, it has to be capable of the voltages for 28s lipo.
so your potential market is limited to someone with all this already that sees your ad and has the desire to do it.

So powerwall idea is out.
The bike could be scrapped out for parts to other zero owners. This makes sense, except every part on the bike is fairly cheap except for the battery... and its a small market. So parting out the bike isnt a good solution. I know when I part out a motorcycle, I get the most for the engine, followed by suspension and wheels. Everything else is just a couple bucks.

Zero will continue to have a low resale value for reasons similar to ICE bikes that are in the same situation.
They need to upgrade parts of their bikes from year to year, as tech prices fall, problems are solved and better solutions are engineered... unfortunutatly this is leaving some people waiting for the next better bike. It happens all the time. Why get the new flagship Hondyamsuzsaki, when the all new CBR1GSZX is coming out next year?   AND it makes the resale of the previous year tank a bit.

Then there is small market demand... People are not all looking for electric bikes. We know the bikes wont work for everyone, could work for some with some changes (in the rider or the bike) but some people will not change their demands from a bike when they can just get a "normal" bike cheaper that fits their needs.  So until the first thing keeps progressing to hit this mark, this will remain.




So you have a bike that loses value quickly and is hard to resell.  Sucks but its true.   Its hard to accept because we both love the bikes, dont see an end to the above issues anytime soon, and most of us have a deeper belief that most that EVs are the future...  but its true.
Good news is, some of us are willing to accept the cost diff in order to gain what the bikes give us.. that cool flying feeling.
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NEW2elec

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Re: Could leasing boost Zero's sales?
« Reply #7 on: August 05, 2016, 08:21:52 PM »

So you have a bike that loses value quickly and is hard to resell.  Sucks but its true.   Its hard to accept because we both love the bikes, dont see an end to the above issues anytime soon, and most of us have a deeper belief that most that EVs are the future...  but its true.
Good news is, some of us are willing to accept the cost diff in order to gain what the bikes give us.. that cool flying feeling.

I've been watching these bikes on cycle trader and Ebay.
The ones with a good ( a bit below average) selling price go pretty quick on Ebay for sure.  Saw a 2015 SR with a buy it now price of $12000 sell in about 3 days.  Now that person took a hit no doubt but the time listed shows there is a good demand and interest.
In 2015 I was across the table from a sales guy with paper work in front of me for a DR650 2008 with 8000 miles for $4000 out the door which was about half price for a new (but the same bike) 2015 DR650. 
I ended up paying twice as much for my 13DS and never looked back.
The DR650 is still for sale by the way.
Maybe not the best ICE bike for the comparison but it was my experience.
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Yon

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Re: Could leasing boost Zero's sales?
« Reply #8 on: August 05, 2016, 09:28:07 PM »

I believe the dealer here in Israel is about to start offering leasing. The numbers I heard were really great and they're planning to include tires and brakes at set intervals with over"mileage" charges. Don't know what they'll do about residual value but guess they've figured it out. Biggest obstacle, aside from the high cost of insurance, is the banks here. Interest is high compared to cars and many just won't lend on a bike.
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Killroy

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Re: Could leasing boost Zero's sales?
« Reply #9 on: August 06, 2016, 12:17:45 PM »

How many motorcycles a year is Zero selling?  Is that enough to pay the bills for Zero. 

I though I heard 2000 a year, which would be really low for my business. 
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MostlyBonkers

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Re: Could leasing boost Zero's sales?
« Reply #10 on: August 06, 2016, 03:05:21 PM »

How many motorcycles a year is Zero selling?  Is that enough to pay the bills for Zero. 

I though I heard 2000 a year, which would be really low for my business.

I'd like to know too and considering they have a really great product, I'd love to see them selling more.

Here are three steps to selling a bike like the Zero:

1. Create a great product. Done.
2. Make the product available to test ride. Done, with more work to do with dealerships.
3. When somebody asks how much, be able to say £10,000 to buy or £500 plus £150 a month to lease for a couple of years. In the same breath. Put it on the price tag with the price to buy in smaller print.

The greatest potential market for Zero's (all but the FX) must be commuters. I don't think commuters are that bothered about customising so much. They are very interested in reducing the cost of their commute. They'll also love the lack of maintenance, twist and go etc. Commuters are more similar to car drivers in some respects. Except they can make a commute work by bike that wouldn't be practical by car. My experience commuting into London is relevant here.

Commuters want a reliable (and fun) tool to get them to work. Two years also covers the warranty period, so no unexpected expenses there either. If it saves money on a season ticket for public transport and gives the opportunity for more fun at the weekend, then it has to be appealing.



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Richard230

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Re: Could leasing boost Zero's sales?
« Reply #11 on: August 06, 2016, 08:04:51 PM »

What you say makes a lot of sense, Bonkers.  But apparently, for whatever reason, it would appear that in many countries there just isn't enough money to be made to make it worthwhile to lease motorcycles - unlike the profit that can be made leasing cars, homes and apartments. And we know that nothing happens in our modern world unless someone makes a lot of money doing it.  ::)
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Fred

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Re: Could leasing boost Zero's sales?
« Reply #12 on: August 07, 2016, 12:02:17 AM »

Leasing would definitely be appealing from a customer's point of view. I'd even be keen to rent one for a couple of weeks to be sure an electric bike meets my needs and expectations. Half and hour test ride is enough to impress me but not enough to reassure me that I'm not going to regret a purchase.
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MostlyBonkers

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Re: Could leasing boost Zero's sales?
« Reply #13 on: August 07, 2016, 12:25:24 AM »

I have to say I think you're right Richard. Not enough money on it to make it worthwhile...
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