Is Electric Car Leasing Leading The Charge Against High Costs?< Back to blog
It’s no secret that EVs are some of the most expensive models of car available. But electric car lease comparison can help you get one for less than £200pcm.
Want to find out how lease deals make electric cars more affordable? Discover everything you need to know about car leasing leading the charge against high EV costs.
Ready to find your perfect electric car, that fits your budget, in just a few minutes? Find your new electric car
3 cost-saving benefits of leasing an electric car
1. Compare the latest models for the best price
With a seemingly endless amount of options now available when it comes to choosing an electric car, it’s easy to get bogged down with trying to find a good price.
The upfront cost of new electric cars is significantly higher than regular Internal Combustion Engine (ICE) models too, and you’re likely to pay at least £17,000 for an entry-level city EV. Unfortunately this won’t suit the average driver, specifically because these cars lack the practicality, battery range and technology that’s expected of any modern day motor.
Unlike when you purchase a car and you need a lump sum of cash to meet the asking price, leasing allows you to pay affordable monthly payments over the course of 2-4 years based on your use of the vehicle. You also won’t need to worry about paying volatile Annual Percentage Rate (APR) interest rates on PCP finance/bank loan repayments for a car on finance.
Using Moneyshake’s ‘Leasing Wizard’ you can find deals on the latest electric cars that suit your monthly budget and requirements.Find me an electric car
2. No risk of depreciation
Car leasing is effectively long-term rental of a new car, with no option at the end to buy and own the car outright.
While the above graph is an indicative example of depreciation of a normal vehicle, electric cars are actually now holding their value much better than petrol and diesel models.
What does this mean for those of you looking to lease an EV? Well, the monthly payments for a lease car are based on the projected rate of depreciation over a few years. And since electric cars – in some instances – keep between 60-70% of their value after the first three years (including Mercedes, Tesla and Porsche models), the monthly rentals won’t be as expensive, since most of the depreciation comes after this period.
Of course, these premium brands won’t be affordable for everyone, so what is depreciation like on average for EVs? You’ll be glad to know that it holds up well against ICE cars. This is mostly thanks to the increased awareness of the environmental benefits of electric cars and time limit petrol and diesel models now face following the government’s announcement of a 2030 ban on these vehicles.
3. Pay for usership, not ownership
As we mentioned earlier, leasing an electric car means you’re paying to use it for an agreed length of time (known as ‘lease term’) and number of miles (from 5,000-30,000 miles per year). On top of this, you’ll be asked to pay an upfront amount worth either three, six or nine months of the car’s monthly lease price (this works against the cost of the entire lease deal, so the more you pay upfront means lower monthly payments).
On the other hand, if you wanted to buy an electric car, you’d have to pay the full amount of the vehicle at the time of purchase. Also factored into the cost of buying an EV is the depreciation, which you’d lose out on when coming to sell it. Since most people only have their cars for around six years before changing, it works out much more cost-effective to have two three-year lease deals than to buy a new electric car.
Here’s an example of a PCP deal advertised online:
- Model: Nissan Leaf 110kW Acenta 40kWh 5dr Auto [6.6kw charger]
- Contract length: 60 months
- Annual mileage: 8,000 miles
- APR: 7.9% (based on an Excellent credit score)
- Deposit: £2,478
- Monthly payments: £351
- Final optional payment: £7,443
- Total amount payable (excl. final optional payment): £23,538
Versus a lease deal for the same model of car, but on a three-year contract:
- Contract length: 36 months
- Annual mileage: 8,000 miles
- Upfront payment: £1,256
- Monthly payments: £209.39
- Processing fee: £240
- Total amount payable: £8,794.04
As you can see, it’s much more cost-effective to lease a vehicle than it is to finance a purchase.
Want to get a lease quote on an electric car that suits your needs? Compare electric car lease deals