Electric Car Leasing
Electric car leasing is rapidly becoming the most popular way for both personal and business customers to benefit from environmentally friendly vehicles that offer comfort, luxury and the latest innovative technology. With 100s of different options, it can be overwhelming to understand where to begin. In this guide, we'll make it simple and break down the must-knows, how it works and key factors to understand before proceeding with your lease agreement.
What is Electric Car Leasing?
Electric car leasing is a contract hire leasing product that allows personal and business customers to lease an electric EV vehicle over a specific period for low-month payments and a low initial upfront payment. As the lessee, you simply select your profile terms options such as initial upfront payment, annual mileage and the length of the lease that fits your requirements. At the end of the lease agreement, the car is simply handed back and you can select a brand-new car on a new lease.
"Electric car leasing delivers massive benefits and is proving to be the most popular and cost-effective method of gaining access to new electric car models with the latest innovative technology." - Luke Mears, VIP Gateway Director
How does electric car leasing work?
The process of obtaining a new electric vehicle through leasing involves several steps. The following bullet points break these down in more detail.
Establish a chosen vehicle that fits your requirements and suits your needs
Select electric or hybrid based on your preferences and choose an in-stock or factory option based on your delivery requirements.
Customise your lease terms such as contract length, annual mileage and monthly rental to fit your budget.
Apply and complete a standard credit check
Once approved, sign your order form and await delivery of your new car.
It's important to understand what you are agreeing to before you proceed. Below are the main 3 key factors often missed when leasing a new car:
Maintenance responsibilities (who is responsible for routine maintenance and repairs) - Select from maintaining the car yourself or choose an all-in maintenance package to and benefit from included maintenance.
Early termination fees (what happens if you want to end your lease early) - It's important to choose the right contract length as fees can be expensive if you looking to end the contract early.
End-of-term options (options for returning or purchasing the car at the end of the lease, fair wear and tear guidelines) - Lease customers will have access to the fair wear and tear guidelines for returning their vehicle.
Benefits of electric car leasing
Leasing an electric vehicle holds massive benefits including environmental benefits, running costs and tax savings. Electric vehicle drivers can make tax savings when choosing the personal or business leasing route. For example, a company car driver choosing to drive an MG4 electric car over an MG HS Petrol car could see savings of up to £200 per month on benefit-in-kind tax. Ask our specialist electric team for more information on how this could benefit you.
Electric vehicle drivers also benefit from reduced running costs when compared to owning a petrol or diesel-powered vehicle. The charging costs in comparison to traditional engines work out significantly lower choosing the electric option.
Battery Range When Leasing an Electric Car
Battery range is an important factor to consider in your new electric vehicle.
Electric vehicle manufacturers are consistently innovating batteries within electric cars allowing increased charging speed and increased battery ranges. For example, The previous Audi E Tron offered a battery range of around 170 miles while the brand new Audi Q8 E Tron offers a battery range of up to 330 miles. It's important to understand to select the right battery range that fits your requirements.
The frequency of charging stations also holds a factor when choosing to lease an electric car. Ideally, it's best to have a home charger fitted to your home. Home chargers are worth the price when compared to the cost saving over the long term. Alternatively, if a home charger is not possible it's important to research the chargers available in your area. In the UK, the charging network is growing rapidly with a target of 300,000 by 2030 to support electric vehicles.
Electric Car Leasing vs. Buying
The overall debate on whether to lease or buy an electric car is a common talking point. The decision come's down to the driver's personal or business circumstances. While data show that leasing is the most popular route, the choice of electric leasing vs buying is still a factor.
Leasing an electric car in comparison to an outright purchase may be a much more affordable choice as ongoing monthly payments are low paired with a low initial upfront payment. However, leasing does build up equity in comparison to an outright purchase.
The main factor when comparing an outright purchase to a lease option of an electric car is the tax benefits. Personal and business customers may see different tax benefits overall but ultimately, the savings can be extremely high. Tax savings can differ whether the car is being obtained personally or through a company.
Potential Tax Savings
Benefit in Kind - Electric cars hold zero emissions allowing a low benefit in kind rate in comparison to petrol and diesel engines. Benefit-in-kind savings differ from each Make and Model.
VAT - Businesses can claim 50% of the VAT due on monthly rentals depending on use.
Business corporation tax - If an electric vehicle is purchased through a company, a first-year allowance of 100% can be claimed against the company's corporation tax bill.
A key advantage of leasing over buying is the hassle-free driving and relationship with the leasing company over having to manage the car and maintenance yourself. Car leasing contracts can include a point of contact, all maintenance costs and a warranty. This packaged with the low monthly payments make leasing an effective route. On the other hand, leasing agreements are restricted by mileage whereas an outright purchase is a complete ownership allowing unlimited mileage throughout the duration. Ultimately, deciding whether to lease or buy depends on your personal or business situation and driver requirements to obtain the right deal.
Overall, individuals should compare the pros and cons of electric car leasing vs electric buying before making the decision of wanting full ownership or choosing the leasing route and saving a large outright payment vs low monthly rentals.
Conclusion
In conclusion, with the availability, increase in popularity and car manufacturers consistently innovating technology, electric cars are the future. Whether it be reduced running costs, tax savings, environmental-friendly or driving the latest luxury, comfort and sports cars - electric car leasing offers fantastic benefits to everybody.
It's important to consider all factors such as charging infrastructure, battery range and charging speeds. Also, ensure to consider the correct leasing package, and check your annual mileage and contract length to suit your requirements.
Start by comparing Electric car leasing special offers and find a car and deal that works best for you. Consider a monthly budget that fits along with a car that suits your requirements. Leasing an electric car can be a great choice in the long run but requires consideration of the right planning of budgets beforehand.