- Published 8 December 2019
- 4 minute read
- By Gavin Braithwaite-Smith
Can I lease an electric car?
You can even pre-heat your electric car from your phone Browse EV lease deals
An increasing number of people are making the switch to electric cars, with motorists keen to ditch petrol and diesel in favour of zero-emission vehicles. Indeed, while the car industry struggles, the electric car sector is surging forward. But can you lease an electric car?
The short answer is ‘yes’, but there are plenty of reasons why you should favour leasing an electric vehicle over a car with a petrol or diesel engine.
If you’re considering an electric car, you’re not alone. Enquiries have skyrocketed in recent months, with the Tesla Model 3 leading the charge (no pun intended).
Here are seven reasons why leasing makes sense and how it could save you money – and help you save the planet.
Electric cars are expensive
EV pioneers like the Jaguar i-Pace aren't cheap Lease now
Even taking into account the UK Government’s £3,500 Plug-in Car Grant for electric vehicles, the upfront purchase price is a barrier for many buyers having electric dreams. The popular Nissan Leaf costs upwards of £27,995 (after the grant) or £349 a month on a Personal Contract Hire (PCH) deal.
Meanwhile, the Jaguar I-Pace – one of the most desirable electric cars you can buy – will set you back at least £61,000 new. Upgrade to the I-Pace EV400 SE and you’ll be asked to fork out £69,995 or £599 a month on a Personal Contract Purchase (PCP) plan after a hefty £12,800 deposit.
One leasing company is offering the same car for less than £545 a month after an initial rental of around £1,600. Put simply, leasing makes electric car ownership far more affordable, especially from the outset, when initial costs are far lower.
Think about that for a moment: you can lease a £70,000 electric car for less than £550 a month. There’s a deal to suit all pockets, from a Renault Twizy at £150 a month to a Tesla Model X costing upwards of £2,000.
One monthly sum
Cost of owning electric cars is fallingEV lease deals
Many drivers favour leasing deals because the fixed monthly fee makes it easier to plan the household budget. But you’ll need to factor in fixed and variable costs, such as fuel, insurance, servicing and road tax (VED).
Electric cars have fewer moving parts, so the cost of maintenance tends to be lower, while some leasing companies include this within the monthly fee. Also, electric cars are exempt from VED, so although many leasing deals include tax, there will be nothing to pay for an EV.
Insurance is unlikely to be included unless it’s specifically mentioned in the leasing agreement. Note that some leasing companies will require a minimum level of cover, so comprehensive insurance might be essential. It means that insurance and the cost of charging are likely to be the only significant extras for the duration of the contract.
Just be sure that the cost of battery hire/leasing is included in the agreement.
Protection from depreciation
Historically, electric cars have suffered from catastrophic depreciation (loss in value over time), with second-hand prices hampered by buyer apathy, high initial purchase prices, a lack of understanding, a small charging network and, in some cases, the cost of battery hire. Much of this is changing – not least the size of the charging network – but depreciation remains the great unknown for many new-to-market electric cars.
By leasing an electric car, you’re protected from the depreciation – it’s a problem for the leasing company. Even if the car is worth next-to-nothing at the end of the contract, you simply move on to the next leasing agreement.
Try before you buy
There could be many reasons why you’re reluctant to purchase an electric car. Maybe you suffer from ‘range anxiety’ or worry about using the public charging network. Leasing an electric car gives you the chance to ‘try before you buy’.
Some leasing companies offer contracts for six, three or even one month, so you can go for a light paddle in the world of electric cars before plunging in at the deep end. It’s electric car ownership with buoyancy aids.
Leasing an EV removes all the riskSee how affordable EVs are
Electric car technology is moving forward at a rapid rate, both in terms of charging times and the distance you can expect to cover on a single charge. Whereas 100 miles of range was formerly the norm, new electric cars have the potential to offer upwards of 300 miles.
Signing up for a three-year PCP deal might lumber you with a dated product in a couple of years, but a one- or two-year lease contract will offer some protection from this.
Unaffected by market forces
Linked to the point about new technology, leasing ensures that you’re unaffected by external market forces that could change the way we view electric cars. While everything appears to be pointing to an electric future, the car industry could look very different in a couple of years.
In the unlikely event that the electric car industry crashes, the leasing company will be forced to take the blow, not you. Similarly, if the market shifts to hydrogen, you won’t be left with the four-wheeled equivalent of a Minidisc player.
You’re an early adopter
This is more of an intangible benefit, but running an electric car is good for your image. Not only is there a level of kudos associated with going green, you’re also taking on a role as an early adopter without the risks associated with purchasing the car outright. You’ll be the talk of the dinner party – not to mention the go-to individual for questions about range and charging.
In summary, leasing an electric car gives you greater flexibility, a better handle on your household budget and entry to one of the fastest growing segments in the car industry.
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