Should you lease or buy an electric car?
When looking to make the switch to an electric car, one of the biggest decisions you’ll make – other than which EV to go for – is whether or not owning one is right for you. Buying an electric car is a major decision that doesn’t allow for much flexibility, which is why many choose to lease instead.
So, is it better to buy or lease an electric car? Below we’ll take a look at the pros and cons of each, and help you decide which might be the best option to get you behind the wheel of a shiny new EV.
A quick guide to buying an electric car
Compared to the rest of the automotive industry, modern EVs are built using tech that’s still relatively new. Because of that, when you make the first moves toward buying electric you might be a little intimidated by the price tags – particularly on some of the more popular and well-known brands and models.
That’s why it’s important to approach your decision carefully. It shouldn’t be an impulse buy, even if you have the cash to spare.
So, what should you think about before buying an electric car?
Do you have the money?
No matter how much you may want to own an EV, it’s always going to come down to whether or not your bank balance has similar ambitions. Even if you’re not looking for a luxury EV, the more affordable four-door makes and models can still set you back at least £22,000. You may make substantial savings by not having to regularly fill a tank of petrol, but if you’re relying on a loan or other funding option, then the interest may not make it worth it.
What are you looking for in an EV?
The same concept applies to every EV – they’re modern vehicles that run on a battery that has to be charged before it gets flat. However, that’s where the similarities end. Every EV is different, and what is right for someone else might not be right for you. Whether it’s range, power, technology, handling, size, or even charge time, it’s essential to do your research so you find the right EV for your needs.
Take one for a spin
After you’ve done your research it’s important to make sure that the EV you have your eyes on is as good in practice as it is on paper. Before throwing down money on a deposit, visit local dealerships or electric car centres and take your chosen car – and a few similar alternatives – on a test drive.
One thing to remember is that EVs are automatic – so if you’re used to driving a manual then you’ll have to remember not to treat it like one. But you’ll soon get the hang of it once you experience slamming your foot on the brake, forgetting that there’s no clutch. EVs also have regenerative braking, which means once you take your foot off the accelerator friction will slow you down much faster. But don’t worry, you’ll soon get used to it and you’ll wonder why you didn’t make the switch sooner.
Consider how you’re going to charge your EV
Charging your EV isn’t something you need to worry about – but it is something you do seriously need to think about. Many who make the switch to electric don’t have a charge point at home, relying on the tens of thousands of charging stations available up and down the UK. However, charging your EV at home is easy and convenient, so it’s an option you should consider. However, installing a charge point does cost around £1,000 so this is something you need to bear in mind as part of your overall budget.
That being said, a professionally installed charge point may not be entirely necessary. It is possible to charge your EV using a standard three-pin plug so long as you have the right adapter – it’ll just be slower and can risk overheating. You can read more about the options in this detailed charging guide.
You’ve bought your EV – now what?
It’s great that you’ve committed and brought home your very own EV. Now it’s time to sell your old petrol or diesel model (if that’s part of your plan) for a lot less than you originally bought it for. That’s the sad but very realistic part of being a car owner.
Unfortunately, the same also applies to your new EV. As the old saying goes, as soon as you drive it away from the dealership, it decreases in value. That means, when the time comes to sell your EV for a newer model, you could have lost a substantial amount of money. According to data from We Buy Any Car, in just three years your electric car could have depreciated by as much as 60%. That’s gonna sting.
Sounds expensive. Is it?
To put it bluntly – yes, it is expensive to buy an electric car. As we already mentioned above, the cheapest five-door EV will set you back around £22,000. When you buy an EV, you’ll usually have to put down a deposit of at least 10% – often more. Many drivers don’t have the money to spare, which makes buying an electric car difficult.
This is why many make the decision to lease an electric car.
What is an electric car lease?
An electric car lease is a solution for drivers who don’t want to own an EV but still want to take advantage of the many benefits. To sum it up, it’s a contract – as short as a month or as long as five or more years – that means you pay for and drive, but don’t own, an EV.
For more information on the ins and outs, check out our guide to electric car leasing.
What are the advantages?
There are plenty of advantages to leasing an EV. The main advantage is it’s a far more accessible way for many motorists to drive their very own – usually brand new – electric car. While it may not be yours in the legal sense, it’s yours to do with as you please (so long as it’s agreed within your contract, of course).
As part of your contract, you’ll know exactly how much you owe each and every month. The upfront costs are also much cheaper than they are when you buy.
Because you don’t actually own the vehicle, you don’t have to worry about depreciation and how much you’ll make (or not) when it comes to selling. Your lease will be agreed upon for a certain period of time, and at the end of your contract, you can either extend the lease, give the car back, or in some cases even buy the car. This increased flexibility reduces the risk you take – if you don’t like your EV, simply give it back at the end of your contract and take out another lease for something different.
What about the disadvantages?
Leasing an EV may be a better option for many drivers, but that doesn’t mean it doesn’t have a few disadvantages as well. While the upfront costs may be cheaper than buying, that doesn’t mean there aren’t any, and you’ll still pay a deposit.
It’s also important to plan ahead – if you need to make changes to your contract then it’ll cost you, and if you need to end your contract early then expect to pay some hefty fees.
Your monthly payments aren’t your only expense, either. While your lease will include most of what you need, you’ll still need to arrange your own insurance. This is important to bear in mind when working out your finances so you fully understand what your monthly payments will be.
Is it better to buy or lease an EV?
Even though we’re EV experts, it’s impossible for us to say for sure whether you should lease or buy an electric car. Each option has its own pros and cons which vary depending on your individual circumstances. Do you have the finances available and you’re not looking to switch your EV in the next five or more years? Then buying may be right for you. Looking for more flexibility and worried about depreciation? Perhaps leasing is what you’re after.
Whether you buy or lease an electric car, there are plenty of things to consider before you sign on the dotted line.
Can you buy your EV at the end of your lease?
More often than not there will be a lease-to-buy option in your contract which will outline the process for buying your EV at the end of your agreement. You’re not obligated to do so, and if this isn’t something you’re interested in then you can simply return the car.
The amount you pay to buy the car will be based on the estimated residual value. Unfortunately, this is usually higher than it would cost to buy a similarly aged car from elsewhere as leased cars maintain a higher value than other cars. If you are considering buying your EV at the end of your lease then it’s important to understand how much this will cost before you take out your lease.
What other options are there?
A third option for those looking to drive an EV of their own is through a subscription. An electric car subscription offers the flexibility and affordability of a lease but with none of the long-term and expensive-to-change commitments.
With an EV subscription, there’s no hefty deposit and you’ll make one affordable monthly payment that includes everything you need to drive the car, including insurance, tax, breakdown cover, and service and MOT costs.
Subscriptions are also flexible. Want to make a change to your contract or swap your EV for another make or model? No problem! Then, when you’re ready to end your subscription, just give 30 days’ notice after your minimum term (ours is 60 days!). It’ll even be delivered and picked up from outside your front door.
For more information, check out our guide on leasing vs subscription to see which is the best option for you.
Subscribe to an EV through elmo
Here at elmo we offer a simple and affordable electric car subscription service that makes driving your very own EV more possible than ever. Browse our wide range of electric cars today and check out how you can make that switch to electric.
We compare some of the key differences between these two popular mobility options.
Is it more expensive to buy an electric car than to lease one?
Yes and no. When buying an electric car you’ll have to pay a large deposit followed by smaller monthly payments. When leasing, your deposit may be smaller but the monthly payments will likely be higher.
Can you extend your lease or end it early?
At the end of your contract you should be able to extend your lease, but it’s best to check your paperwork before you sign. If you want to end your lease early you can, however, it’ll likely lead to some eye-watering fees.
Is it more convenient to buy or lease an electric car?
This depends on your definition of convenient. However, leasing an electric car will generally come with more flexibility than buying would.
Plus, subscriptions mean you can change your car when your needs change. Got a baby on the way and your small city car won’t do for your growing family? No worries – swap it for a bigger one. Not sure if the car you want will be unnecessarily big in the long run? Downsize after your minimum subscription term – it’s not a problem. Maybe you just like changing your car a little more often? Subscriptions offer the best bits of leasing over purchasing a car outright, without any of the hassle or huge deposits.