Can You Lease An Electric Car?
Electric car leasing lets you drive a brand-new car while making fixed monthly payments for the length of your contract. This is a great option if you want to reduce your emissions while driving, but can’t necessarily afford the high list price that comes with these feats of modern engineering.
Read on to discover everything you need to know about leasing an electric car.
What is electric car leasing?
In the past, EV lovers would buy/finance the car and lease the battery due to fears of battery longevity and price. However, EV leasing gives you access to models which are brand and are covered by two warranties – one for the battery and one for the car (sometimes they’re bundled together).
You won’t own the vehicle, but instead will have it for 2-3 years during which you’ll pay a fixed monthly price for the vehicle and agree to an annual mileage between 8,000 and 30,000 miles. This is ideal if you want to test the waters with EVs without having to commit to an expensive purchase as you give the car back at the end of your contract with nothing more to pay (so long as you’ve stuck to the agreed mileage and there’s no damage to the car).
Vehicle technology is only going to get better and leasing allows you to ‘follow the trend’ by upgrading to more improved models as the years go by.
5 Advantages of leasing an electric car
Leasing an electric car comes with a number of cost saving advantages. From cheaper maintenance to road tax exemption, here are six compelling reasons to lease an EV.
1. More for your money
It’s no secret that EVs have a higher list price than petrol/diesel vehicles and usually this is out of budget for most. However, by leasing instead of purchasing you don’t need to worry about forking out large sums of cash – all you need to do is pay a manageable monthly sum. For example the Smart ForFour EQ is available from £161.19 per month compared to its £20,785 list price.
This gives you more options to play with allowing you to either opt for a larger deposit to reduce monthly payments or to increase your monthly payments for higher end choices.
2. Warranty protection
Another advantage of electric vehicle leasing is that you have peace of mind in knowing that the car you’re getting is brand new and protected by the manufacturer’s warranty. For most brands, this is between 5-8 years on the key components (i.e. the battery and the electric motor). With most lease agreements lasting four years or less, you can take solace in the fact that should anything suddenly go wrong with the drivetrain that you will be covered to have it fixed at no extra cost.
3. Chargers included with your deal
In some cases you will find that leasing providers have partnered with car charging companies to offer chargers as part of an electric car lease deal. At Moneyshake, we have multiple providers that can offer you a great price on a home charger with your new EV, with the £350 OLEV charger grant included too.
This can save you a lot of hassle having to make separate arrangements to have a home charger installed for your electric car. Instead, you can just tell the company you’re leasing the car from what your charging needs are and they can put you in contact with the network provider so that you can get the car and charger at the same time.
4. Low tax for business leasing
You won’t have to worry about taxing your electric car if you’re leasing it for your personal use. However, many businesses wanting to lease a brand-new car to use on the job face having to pay company benefit in kind (BIK) tax for the vehicle.
However, this tax is calculated based on each car’s CO2 emissions and more polluting models pay a larger amount of tax. Because EVs produce no emissions from a tailpipe, the BIK tax for them is 0% for the current 2020/2021 financial year, rising to just 1% for 2021/2022 and then 2% in 2022/2023.
5. No depreciation
A major advantage of leasing an electric vehicle over purchasing is that you don’t need to worry about the depreciation of the vehicle. This can be a major concern for would-be owners who may end up out of pocket when it comes to selling their investment. However, with leasing you don’t own the vehicle so there’s no need to worry about depreciation. Once your contract is up you simply hand back the keys (provided you’ve stuck to the agreed mileage and there’s no damage to the car).
3 disadvantages of leasing an electric car
While leasing an electric car can be an enticing option, there are four reasons why it might not be for you.
Even though more of the big players (e.g. Volkswagen and BMW) have succumbed to market trends and now offer electric vehicles, the choice is still rather limited. The industry’s focus appears to be on small city cars and hatchbacks, with family orientated vehicles and pickups merely an afterthought.
If you’re looking for an electric alternative to the classic seven seater family minivan, for example, you’ve either got the somewhat unsightly Nissan e-NV200 or the high end Tesla Model X. Neither of which really fit the needs of the average buyer.
It’s hard to deny that electric car leasing is more expensive than if you were to lease a standard car. This is because EVs are some of the latest models to be produced and come packed with the best technology features.
Although you can get city cars such as the Smart ForFour EQ for less than £200 per month, these cars won’t be suitable for many drivers because of their limited space for passengers and luggage. On top of this, these models tend to have a lot less range in their locker and are therefore suited to the urban setting that their name ties them to.
The Renault Zoe is one of the most affordable EV hatchbacks you can lease for at least £230 per month. While this is a reasonable price considering its 239-mile range and it being a great all-round family car, you could get a mid-range Renault Megane for £30 per month cheaper. Despite not having the same environmental benefits of the Zoe, the Megane is just as well equipped in terms of its onboard technology and has a much larger boot, plus more passenger space too.
With many people looking to cut monthly costs on products that they’ve financed, it may take some time before EVs can compete with combustion engine cars when it comes to pricing.
3. No option to purchase
One issue drivers may have with leasing an electric car is that they won’t be given an option to own it at the end, especially if you really like the car after spending a few years with it.
The nature of a lease deal means that you only pay to use the car for a set period for a few years before giving it back to the leasing company. However, if you think you may be interested in owning the vehicle at the end, you should consider alternative finance which allows you to do this, such as a PCP (Personal Contract Purchase) agreement.
Is leasing cheaper than buying an electric car?
Due to their cutting edge technology and modernity, electric cars are some of the most expensive models out there. According to research by JATO Dynamics the average retail price of an electric car was 81% higher than other cars purchased in the first half of 2019. For example, the Kia e-Niro has a list price of £34,995 after the £3,000 UK plug-in car grant, compared to a lease price of £409.64 per month.
When it comes to leasing an electric car you pay an initial payment (sometimes referred to a deposit) and a set of fixed monthly payments to cover the depreciation of the vehicle over the time/mileage you’ve used it.
We can use the Kia e-Niro to demonstrate how total lease cost and purchase cost differ. See how the cost differs between a lease with a three-month initial rental, 36-month term and an allowance of 8,000 miles compared to purchasing the vehicle out right.
Another alternative could be buying second hand using sites like AutoTrader. However, these sites still show high list prices with current listings for used e-Niros only cheaper than the new vehicle price by a few thousand.
Will I get a charger with the car?
While you won’t always get a charger with the car, Electric Vehicle Supply Equipment (EVSE) comes as standard which will allow you to charge your car from either a regular 3-pin socket or a home/public charger.
You’ll either receive a 3-pin-to-Type-2 cable, a Type-2-to-Type-2 cable or both depending on the vehicle. For example the widely popular Renault Zoe comes with both cables.
The only difference between the cables available are the input connections. The 3-pin-to-Type-2 cable can use any 3-pin, whereas the Type-2-to-Type-2 requires a Type-2 input such as a home charger or public charging station.
It’s worth noting that some of Moneyshake’s providers partner with other specialist charging providers and can offer you a deal to include a home charger with the car. However, this would only be suitable for those eligible for a home charger to be installed.
Don’t worry if you can’t access proper home charging though. A huge network of public chargers exists to keep your EV charged wherever you are. There are even free chargers located at selected supermarkets and workplaces. For more information read our article on where you can charge an electric car.
5 best electric car lease deals
With more and more manufacturers jumping on the all electric bandwagon, a wider choice of vehicles is becoming available to consumers. Here are five of Moneyshake’s favourites.
1. Renault Zoe – from £212.08pcm
- Real-world range: 233miles
- Charging time (slow/fast/rapid): 14h/8h/40mins
- Safety: 5-star NCAP rating, Z.E Voice, emergency brake assist.
- Practicality: 338 litre boot
- Performance: 86-134bhp, 0-62mph in 8.1-13.1 seconds and 84mph top speed.
Moneyshake’s expert opinion: The Renault Zoe is a great electric car for EV first timers having been named What Car? Best Small Electric Car for the last seven years. A modern design, smart interior and a generous range set the Zoe leagues ahead of the competition.
2. Hyundai Ioniq – from £240.02pcm
- Real-world range: 193 miles
- Charging time (slow/fast/rapid): 11h/6h/30mins
- Safety: 5-star NCAP rating, lane departure warning with lane keep assist, driver’s seat lumbar support.
- Practicality: 357 litre boot
- Performance: 118-134bhp, 0-62mph in 9.6-9.9 seconds and 102mph top speed.
Moneyshake’s expert opinion: What it may lack in design, the Ioniq makes up for in tech, range and practicality. A 10.25 inch infotainment system and embedded 4G Bluelink connectivity keeps you updated with live traffic movements and remote access allows you to prematurely warm up the seats before you enter. Overall a great allrounder.
3. Vauxhall Corsa-e – from £251.20pcm
- Real-world range: 170 miles
- Charging time (slow/fast/rapid): 14h/7h/40mins
- Safety: 4-star NCAP rating, lane assist, speed sign recognition
- Practicality: 309 litre boot
- Performance: 134bhp, 0-62mph in 8.1 seconds and 93mph top speed.
Moneyshake’s expert opinion: The Vauxhall Corsa has been a British favourite for years and the Corsa-e is likely to cause a similar stir. Not only does it have an eye catching design, it’s elegant array of colour choices are somewhere between vibrant and ostentatious. Strong performance, good practicality and a nice range of tech as standard make the Corsa-e an impressive small electric.
4. BMW i3 – from £327.10pcm
- Real-world range: 194 miles
- Charging time (slow/fast/rapid): 12h/6h/40mins
- Safety: 4-star NCAP rating, anti-lock brakes, stability control
- Practicality: 260 litre boot
- Performance: 167bhp, 0-62mph in 7.3 seconds and 93mph top speed.
Moneyshake’s expert opinion: BMW’s futuristic looking i3 is fast off the mark while still providing more than enough range for daily driving. A slightly beefier sport variant (the i3s) is also available with a reduced range for those favouring enjoyment over efficiency. The interior continues the sci-fi exterior styling while still maintaining usability and comfort. The i3 is perfect for those wanting to live out the early adopter fantasy to its full.
5. DS 3 – from £323.69pcm
- Real-world range: 155 miles
- Charging time (slow/fast/rapid): 14h/7h/40mins
- Safety: 4-star NCAP rating, autonomous emergency braking, lane keep assist
- Practicality: 350 litre boot
- Performance: 134bhp, 0-62mph in 8.7 seconds and 93mph top speed.
Moneyshake’s expert opinion: The electric version of the DS 3 starts at a higher trim level than it’s less environmentally friendly siblings, giving you a wealth of great tech from the off. An adequately sized 7 inch infotainment display is accompanied with sat nav and smartphone integration as standard and the quirky dashboard more than does the job. The DS 3 also boasts a confident love/hate design that sets it apart from the blander looking rivals in its class. Overall a good option for those wanting a slightly larger EV.
Want an eco-friendly car without putting a dent into your savings? Compare our electric car lease deals now for offers on electric models that can help reduce your carbon footprint as well as save you money in the long run.
Do you have more questions regarding electric cars or electric leasing in general? Find out more by heading over to our electric car guides.