Electric Car Leasing
Leasing models have been around since the early 1940’s and have grown in popularity because they provide drivers easy access to the latest makes and models for a more affordable price. Electric car leasing is no different.
- Leasing a car is a traditional method used by many drivers instead of buying outright
- Electric car leasing deals often last for anywhere between 2-5 years, with a fixed price and a fixed car
- Modern-day models such as electric car subscriptions offer a flexible and cost-competitive alternative to leasing – with no lengthy contracts or upfront deposits.
What is an electric car lease?
With electric car leasing, commonly referred to as ‘EV leasing’, drivers pay a monthly fee for an electric car, rather than buying and owning it outright. It’s like renting a car – but over a longer term. You can enjoy the latest electric cars by spreading the costs over a fixed term which is usually 2-5 years, for a fixed fee and a fixed mileage agreement.
How does leasing compare to subscribing?
Electric car subscriptions have emerged as a cost-effective and flexible alternative to electric car leasing. We like to call subscriptions ‘the smarter way to a lease a car’.
Electric car subscriptions bundle up all your driving needs into one monthly package. Car rental, insurance, maintenance, breakdown cover and taxes for example are all included in a monthly payment. Plus, with a subscription you’re not tied into a lengthy contract – the minimum term is usually 1 – 3 months. That means that unlike with leasing deals, you can switch to another car if you wish, or stop anytime after the short minimum term.
On elmo, you can choose between two options:
- If you want ultimate flexibility, then elmoFlex is for you. With just a 60-day minimum term, you can swap to another electric car or stop with just 30 days’ notice. Perfect for drivers who don’t need a car 365 days a year.
- elmoSave allows you to commit to a 12-month minimum and enjoy our best pricing. Great for drivers who need a car full-time and want the convenience of an all-inclusive package.
For more details on the main differences between leasing and subscribing, head over to our leasing vs subscription page.
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How does EV leasing work?
With an electric car lease in the uk, an upfront deposit is usually required, followed by monthly payments for the car, spread over several years as agreed by your lease contract. At the end of your lease term, you can return the car and trade it in for a newer car by starting up a new lease agreement.
Leasing costs vary greatly depending on the car you choose, the length of the lease contract and your mileage. Be sure to make sure you understand all of the costs involved before signing and returning your lease contract!
Fixed contract length
At the start of any leasing deal, a contract length must be agreed. Usually, the longer the agreement, the cheaper the monthly payments. Leasing deals are typically fixed for two – five years and you are also locked into the same car for that period.
With leasing deals, there is usually a fixed mileage amount in your contract. That amount depends on the leasing company and what is agreed at the start. Fees may be applied if you exceed this limit.
Maintenance and servicing
As a car lease holder, you are responsible for the maintenance of the electric car. You have to ensure it’s kept in a good driving condition and pay for any repairs.
Why lease an electric car?
Leasing an electric car is a great alternative to purchasing. Electric cars are currently more expensive than their petrol or diesel counterparts, so going green is often unaffordable for many drivers. EV leasing also avoids the risk of depreciation since you usually don’t own the car and aren’t responsible for selling it on.
- Brand new car. With ev leasing, you can get a brand-new electric car straight away, so you can stay on top of the technology upgrades as they are developed and drive with the best features. You also get to enjoy a new car at the end of your lease deal, every 2 to 5 years.
- Reduced costs. There are reduced upfront costs with leasing, making driving an EV more affordable than ever.
- Fixed payments. Fixed monthly payments allows you to budget as you know exactly how much you’ll be paying for the car.
- Reduces risk. EV leasing removes the risk of depreciation. Since you don’t own the car, you can hand it back after your contract ends and don’t have to worry about trying to sell it. You also avoid the issues and costs that often occur with older cars.
- Flexible contract lengths. With electric car leasing, there is sometimes the option to choose a short-term lease. However you may pay more each month for this greater flexibility.
- Tax benefits. Depending on your circumstances there can be huge tax benefits to leasing a car.
What are the different types of electric car leasing?
There are a few different types of electric car leasing agreements in the UK that you can choose from.
Personal Contract Hire
With a personal contract hire ev lease, you pay a fixed monthly payment which is essentially a monthly ‘rental’ fee over an extended period, as agreed at the start of your contract. This is calculated based on the EV’s expected depreciation value. After your lease ends, there is no option to buy the car, instead you simply hand it back. At the end of your contract, you have the option to opt into a new ev lease deal, getting a brand-new replacement electric car and signing a new contract. This is the most traditional form of car leasing.
The next two options are types of personal finance options for purchasing, that are very similar to leasing. The key difference is that with these options, drivers can own the EV at the end of the contract if they wish.
Personal Contract Purchase
On a personal contract purchase, drivers pay a deposit, followed by a series of monthly payments for an agree period, or ‘lease’. These payments essentially cover the cost of the car depreciation. Once your ev lease comes to an end, there is still an outstanding balance to pay which is known as a balloon payment or a minimum guaranteed future value. Basically, the value of the car at the end of the lease which is pre-agreed. At the end of your electric car lease, you have the option to pay the ‘balloon payment’ and own the car, or not pay it and return to the lease company.
With a hire purchase electric car lease, you pay a deposit followed by monthly payments based on the price of the electric car and the number of instalments. Once your instalments have ended, you own the electric car. Overall, you’ll pay less than most other lease deals, but your monthly instalments may be a little higher.
Do you need to pay a deposit with leasing?
Yes, with nearly all electric car leasing deals you need to pay a deposit or ‘initial rental’ fee. This is usually a few months leasing payment upfront and depends on the leasing company. The deposit is non-refundable and helps to lower your monthly payments and eliminate risk for the leasing company. It’s rare to find a leasing contract with no deposit.
Is leasing an electric car worth it?
Well, that really depends on your individual circumstances. Leasing deals provide many drivers with access to brand new electric cars, that they otherwise couldn’t afford to buy outright.
However, there are many considerations – such as the fixed payment you’ll have to commit to for several years and any ‘extra’ costs you may be liable for when you hand the car back. Read our guide to compare leasing vs buying an EV.
Does electric car leasing include insurance?
For most leasing companies, insurance is not included and will need to be taken out by the driver before the car can be driven.
Is electric car leasing a good idea?
Electric car leasing provides an affordable way to drive your dream electric car right away. The costs are spread out over your leasing term, which is much more affordable than buying a new electric car outright.
If you know exactly which EV you want and are happy to keep the same car for several years, then leasing might be the right choice for you.
Is subscription better than leasing?
They are different models, with different pros and cons. Subscriptions are better if you want greater flexibility. Leasing may be preferrable if you are happy to stick with the same car and potentially purchase it at the end of your contract. It’s always important to weigh up all the options!
Is it cheaper to lease an electric car?
Electric cars are still relative newcomers on the automotive scene, so they are still expensive to buy outright. Leasing an electric car can be a more affordable option, as the costs are spread over several years. Even more flexible though are electric car subscriptions. There’s no deposit, and often the minimum term is anywhere between 1 and 3 months – offering greater flexibility for drivers.
We compare some of the key differences between these two popular mobility options.
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