Cost of Leasing an Electric Car

What factors influence the cost of electric car leasing?

Several factors affect the cost of leasing an electric car:

• Vehicle Model: Premium models with larger battery capacities, longer ranges, or advanced features tend to have higher lease costs. More affordable electric cars typically offer lower monthly payments.
• Battery Size and Range: Cars with longer ranges generally cost more to lease, as they feature larger, more expensive batteries.
• Lease Term and Mileage: The length of your lease agreement and the annual mileage allowance influence the monthly payments. Shorter lease terms or higher mileage limits often result in higher costs.
• Deposit Amount: The initial payment, or deposit, can impact monthly costs. A higher upfront payment usually leads to lower monthly payments, while a low or no-deposit lease may increase monthly fees.
• Maintenance and Servicing: Some lease agreements include maintenance packages, which can increase the overall lease cost but provide peace of mind by covering servicing and repairs.
• Government Incentives: Grants or tax incentives can reduce the upfront or monthly lease costs for electric vehicles, making them more affordable.

How do electric car lease costs compare to petrol or diesel?

Leasing an electric car can have a higher monthly cost compared to petrol or diesel cars due to the initial price of electric vehicles, which tends to be higher. However, electric cars typically offer significant savings in running costs. Fuel expenses for petrol or diesel cars are higher compared to the cost of charging an electric vehicle, and EVs benefit from lower maintenance costs due to fewer moving parts. Additionally, electric cars are often exempt from road tax and congestion charges and can qualify for lower Benefit-in-Kind (BIK) tax rates for business users. While the lease payments may be higher for an EV, the overall running costs can make electric cars more cost-effective in the long term.

What are the running costs of an electric car?

Electric cars have much lower running costs compared to petrol or diesel vehicles. The key running costs for Evs include:

• Charging Costs: Charging at home is the most affordable option, especially if you take advantage of off-peak electricity tariffs. Public charging stations vary in price, but rapid chargers tend to be more expensive than home charging.
• Maintenance: Electric cars have fewer moving parts than traditional vehicles, resulting in lower maintenance costs. There’s no need for oil changes, and components like brakes and tyres typically wear more slowly due to regenerative braking systems.
• Road Tax and Congestion Charges: Evs are exempt from Vehicle Excise Duty (road tax) and often qualify for discounts or exemptions from congestion charges, especially in cities like London.
• Insurance: While insurance premiums for electric cars can be higher than for petrol or diesel cars, the growing popularity of EVs is helping to balance the market.

Overall, the running costs of an electric car are considerably lower, which can offset the higher lease payments.

How to reduce the cost of leasing an electric car?

There are several ways to lower the cost of leasing an electric car:

• Government Grants: Take advantage of any available government grants or tax incentives, such as the Plug-in Car Grant, which can lower the overall cost of the vehicle.
• Adjust Mileage Limits: Choose a mileage allowance that matches your driving habits. Lower mileage limits typically result in cheaper lease payments.
• Increase Your Initial Payment: Opting for a higher upfront payment can reduce your monthly lease payments, making the overall cost more manageable.
• Consider a Shorter Lease Term: Shorter lease agreements can sometimes lead to more affordable deals, allowing you to upgrade to a newer model sooner.
• Include Maintenance Packages: Some lease agreements bundle maintenance costs, which can be cheaper than paying for servicing and repairs separately.
• Look at Used Electric Car Leases: Leasing a pre-owned electric car can significantly reduce monthly payments while still providing the benefits of EV driving.

By following these tips, you can make leasing an electric car more affordable and cost-effective.