How to get a free car: lease an electric car (but sadly, not a Tesla)

While visiting California this month I learned that it is possible and practical to get a free brand-new car. Start by having an above-average income, a good credit rating, and a house that consumes at least $300/month of electricity (California is among the most expensive states in the U.S. for electricity so the last requirement is not challenging to meet). “We got a Fiat 500E for $129/month,” said a software engineer, “and having an electric car in the household enabled us to get a different rate plan from PG&E that saved us more than $100 per month. The lease rates are low because the leasing company is entitled to all of the tax credits.”

Can it work for apartment-dwellers? A software engineer at one of Silicon Valley’s most profitable companies earns many times the median California household income of $61,000 per year (Census), but still not enough to purchase a house. He pays $70/month to lease a Chevy Spark and can charge it at work. (He likes the car, but says that it might not be practical in the Northeast due to the fact that using the heater eats into the 80-mile advertised range.)

Both electric car owners report negligible additional costs, e.g., for maintenance or energy.

What do readers think? Is this the future for upper-middle-class Americans? Free electric cars funded by taxpayers and lower income customers of the same electric utility?

[And what if you can’t afford a house or an apartment? In one conversation I learned about two ways for Californians to get free or nearly-free housing. Son #1 of the person to whom I was speaking was a software engineer making a well-above-median income. He was living with, but not married to, an artistically-inclined girlfriend who earned a modest amount. She therefore qualified to purchase a $3 million apartment in a brand-new building in San Francisco… for $270,000. She can’t live there for a day and turn around to sell it for $3 million, but her income could rise to $1 billion per year and she wouldn’t have to move out. She could move to Los Angeles and keep the place as a personal vacation destination (the monthly maintenance fee is comparable to the cost of one night in a local hotel). None of this would be available if the happy couple had gotten married prior to the purchase. Young folks: Keep this in mind if you’re partnered with someone and there is a big income disparity; you’re saying goodbye to a lot of valuable government handouts if you marry. Son #2 also worked in the tech industry and was frugal so he’d saved up enough to purchase a house without a mortgage. The house cost about five years of after-tax income. He was married for one year to a person with an Ivy League education in a field with a BLS median pay of roughly $70,000 per year. After a California divorce, his former-partner-for-one-year is now the owner of this house and thus well-positioned for the free electric car deal (above).]



  1. John V

    November 19, 2015 @ 3:57 pm


    It took me several minutes to wade thru IRS form 8936 and then a quick search to confirm: I was wrong about the Fed tax credit not going to high income people. There are several tax credits (lines 48-54 of 1040) that might affect the credit, so be cautious. Also, the credit will only offset taxes you would be paying in that specific year, so you might need a high income to be able to fully use this credit. Maybe better to lease and avoid the filing issues?

    I think that very good Fiat deal was only available in California, and had something to do with “compliance cars”.

  2. jay c

    November 19, 2015 @ 5:50 pm


    The main reason in SoCal to get an electric or plug-in hybrid car is to use the HOV lane. At the time I bought my car, the rebates from the federal government and the state paid for the car the first year. I drive on one of the most congested freeways in the US to and from work. If I take my plug-in hybrid, I save 30 minutes each day (10 in morning, 20 in afternoon). If you use BLS median of $35 an hour for my time commuting, I save a car payment every month just in the shorter commute. I net save $40 each month by using discounted electricity to charge the car. On top of that we get the preferred electric rate for the entire house in the evenings so we actually come out $150 ahead by having a plug-in hybrid. Why would anyone not buy an electric or plug-in?

  3. Javier

    November 20, 2015 @ 1:52 pm


    I replaced a gas car with a Nissan Leaf almost three years ago. I charge at work most of the time, at no cost to me, resulting in a near zero fuel bill. The lease payments are about similar to what I was spending in gas commuting to/from work and running errands around town, and the insurance coverage was only slightly higher for the Leaf.

    Thus, it wasn’t exactly a net-zero transition, but pretty close.

  4. Dave D

    November 20, 2015 @ 5:52 pm


    Regarding the second part–why aren’t all starving artists in Los Angeles flipping those $3M apartments for a quick $2.7M profit?

  5. philg

    November 20, 2015 @ 7:39 pm


    Dave: As noted in the original posting “She can’t live there for a day and turn around to sell it for $3 million.” I.e., there are legal restrictions on re-selling the apartment at market rates. She can use it. She can sell it back into a low-income pool for perhaps slightly more than she paid. Those are her choices.

  6. Smartest Woman on the Internet

    November 21, 2015 @ 6:26 pm


    A nearby Florida city recently installed two electric vehicle charging machines (users pay via credit card or smartphone app); and this city just purchased its first electric vehicle, a Nissan Leaf, for administrative staff. To acquire the vehicle, the city had to do a “municipal lease-purchase” through a leasing agency in order to indirectly reap the benefits of the $5000 federal tax credit – the leasing agency reduced the purchase price by $5K.

    She can’t live there for a day and turn around to sell it for $3 million

  7. Smartest Woman on the Internet

    November 21, 2015 @ 6:30 pm


    She can’t live there for a day and turn around to sell it for $3 million

    Three months ago, I bought a foreclosed waterfront Florida condo from the Federal National Mortgage Association (Fannie Mae). The sale contract forbid me from reselling the property at more than the purchase price for three months. The market value of the unit has gone up about 28% during those first three months.

  8. anon

    December 1, 2015 @ 7:48 pm


    How is a spouse of one year entitled to (what I assume was) a residence purchased prior to the marriage in California?

  9. philg

    December 1, 2015 @ 8:53 pm


    Anon: That’s the beauty of the legal system. Whatever a judge orders is what you were “entitled” to! I think that in this particular case the spouse who got the free house was able to argue that she had put some money/effort into it and that the purchase was during the marriage. So it wasn’t a completely clean piece of separate property and therefore was subject to a judge’s discretion as to whom to give it to.

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