10 Mins read

The Pros & Cons of Leasing an Electric Car

The Pros & Cons of Leasing an Electric Car

We look through the key factors such as depreciation, battery life and service costs to weigh electric car leases up against other options.

In this article…

As electric cars become more affordable and combustion engine vehicles continue to be phased out, it’s clear where the future of motoring is headed. There is high demand for these eco-friendly modes of transportation, but one option many haven’t considered is an electric car lease, which could be the solution to drive a brand-new EV easily.

But what is the appeal of leasing and the drawbacks that make some customers hesitant to go in that direction? We look through the key factors such as depreciation cost, battery life, service and maintenance and costs to weigh electric car leases up against other financing options. Here is where you’ll find out which finance option is right for your lifestyle and budget.

Running Costs

Running costs for an EV can be either very low or much higher than filling up at a petrol station. You can charge up for free at some modern petrol stations, supermarkets, and shopping centres but many will incur costs and may hold restrictions such as period of time or require you to purchase. It is always best to check. Some offices are now setting up charging stations in their parking spaces, so if you’re lucky enough to be able to charge it while you’re at work using company electricity, your running costs will be essentially nothing.

You can charge with a standard three-point plug or at a charging station at a fuel station which typically takes around half an hour. However, EDF Energy found that if energy prices were sitting at 17.2p per kWh, travelling 100 miles at a standard consumption rate would cost 5p per mile if you charge up at home.

Additionally, since EVs emit no carbon emissions, tax costs are massively reduced, too. Road tax can be slashed massively and could potentially save you £1,000 over five years based on a new EV model priced at £40,000 versus a similar petrol-powered model. However, this could change as the government reacts to the growing popularity of electric cars.

Service & Maintenance

With fewer moving parts than a combustion engine vehicle, electric cars are far less expensive to maintain. EV batteries usually have a warranty of eight years, giving you a very long time with that safety net in case the battery is not up to standard. Servicing is still as regular as combustion engine cars, however, since they are heavier and more likely to wear out the tyres and suspension parts.

Battery Life

EV carmakers have long said that EV batteries will outlive the cars themselves, so if you’re on an electric car lease, you’ll likely never have to worry about replacing the battery. According to RAC, EV batteries can last over 10 years or 100,000 miles before becoming unusable, and possibly twice that in some extremely good cases.

As with all batteries, the battery health will degrade over time, meaning it will affect the overall range by about 20% but not the acceleration performance at all. With owning an electric car, you may find this impacting your range over time, but with a lease car that you drive for a maximum of four years, you’ll never have to think about this before returning your vehicle to the leader.

Depretiation Cost

Electric cars depreciate at a faster rate than petrol or diesel cars. According to analytics site Autovista, the average retained value for a used electric car after 3 years and 36,000 miles is 47.6% of its new cost, compared to 72.8% in self-charging hybrid models and 67.1% in petrol cars.

The reason for this links back to the battery life, and makes electric car leases more expensive. However, compared to owning an electric car, you don’t have to think about servicing the car or replacing equipment, as you’ll drive it during the best years of its life.

Choice of EVs

Finding an electric car leasing deal gives you just as much choice as would get in a standard vehicle marketplace. A study conducted by ACL Automotive estimates that 20% and 30% of new cars in the UK are leased out.

Here at cars2buy, we aggregate lease deals from across the UK to give you an incredible amount of choice as opposed to single leasers. This gives you much more choices to find the right model and the perfect electric lease deal for you.

There are also dedicated ranges of electric van leases and business car leases at cars2buy, so you can browse for your next EV commercial vehicle to haul cargo with, or an electric company car that adds a huge benefit for you and your staff.

Other Financing Options

Compared to other finance options, an electric car lease is much more steady and manageable month-to-month. Other options include taking a mortgage out on an electric car deal, but this leaves you saddled with a car for far longer, resulting in increasingly expensive repairs to upkeep it. You may not own a lease car, but you don’t have the financial pressures that come with ownership, either.

A medium ground between buying the car outright and a lease is a hire purchase in which you pay a deposit and then pay the rest in monthly instalments. However, cars2buy offers no-deposit lease deals that cut out the massive lump sum and have a more manageable way of paying for the car.

Once you finish the lease, you can start with another electric car with a similar cost so you can refresh your car for a brand-new, up-to-date model with no massive impact on your monthly costs.

Browse our range of EV lease deals today