Car leasing is incredibly popular in the UK, and with the rise of electric vehicles and the upcoming ban on sales of new cars with petrol or diesel engines more and more people are exploring the possibility of leasing an EV rather than buying one. Here we explain the pros and cons of leasing an EV.
+ no depreciation to worry about
+ large choice of cars to choose from
+ car covered by warranty
+ cheap running costs
When you buy a car outright any value lost from the car is your problem, as you will get less money for it when you come to sell it on or trade it in. When you lease a car you are effectively renting it, so any loss in value will be worn by the company or manufacturer you are leasing it from. That said, you will be expected to stay within a certain mileage during the lease deal and if you exceed the mileage you will be penalised, and the same goes for any damage you do to the car beyond reasonable wear and tear.
Because a lease deal is worked out on how big a monthly payment you can make, rather than how much the entire car costs, you will probably find you can choose from a larger number of cars. Today there are many EVs to choose from so you’ll need to do some research into what’s right for you.
During a leasing deal your car normally is covered by the manufacturer’s warranty which means should it go wrong or break down it is the responsibility of the manufacturer or dealership to get it fixed as soon as possible.
One of the most attractive aspects of an electric car is the fact it costs less to ‘fuel’ than a petrol or diesel car. But most EVs are more expensive to buy than combustion-engine versions of the same car, which means it can take a long time to recoup the extra you pay in running costs, but when you are leasing you are only paying a fixed monthly amount so it should be a lot easier to work out how much you will save day-to-day. It’s worth noting that EVs still tend to cost a bit more to lease than petrol cars, so make sure you do the maths before committing.
- you don’t own the car
- your mileage is limited
- penalised for damage or excessive wear and tear
Because a leasing deal essentially a monthly rental, the car is not actually yours. This means you will at some point have to hand it back to the manufacturer or dealership and you won’t be able to get any money for selling it. For some people paying money for something you never actually own is objectionable.
Each leasing deal will have a limit on the number of miles you can drive during the term, used by the manufacturer or dealership to limit how much value is lost on the car. If you exceed the stipulated mileage you will be legally obliged to pay, and it can ramp up costs very quickly. A typical charge is 10p per mile over the limit, so be very careful.
It’s a similar story for any damage done to the car which is your fault or any wear and tear which is deemed beyond reasonably expected. This is heavily enforced by leasing companies so you will have to be extremely careful about causing any damage, and that can make leasing an unattractive option for those with kids or dogs.
Q: Do I have to lease a battery separately when leasing an EV?
A: When EVs were new that happened, but it’s rarely the case now. EV lease deals should guarantee the lifespan of the battery during the lease deal.
Q: Can I end my lease deal early if I don’t like the car or can’t afford it?
A: You will probably have to pay a fee to end a lease deal early. Make sure you check how much it is before committing to a deal.
Q: What happens if I miss my monthly payment?
A: If you continuously miss payments you may have the car taken from you and it can affect your credit score. If you are struggling then speak to the leasing company and let them know, and they will help you work out the best way forward.