Electric Car Leasing Costs
The cost of leasing an electric car can be far more affordable than buying one. There are plenty of other benefits too, such as flexibility if you like to switch up your vehicle every so often without needing to sell your car first (for much lower than you originally paid for it).
But how much does it cost to lease an electric car, and what are the various costs that go into it? Below we’re going to take a look at everything you’re likely to pay when it comes to leasing an EV. Psst – we offer electric car subscriptions, which are an all inclusive alternative to leasing an electric car. More on that later.
What are the different costs associated with leasing an EV?
Okay, leasing an EV is definitely more accessible for many drivers thanks to its flexibility and affordability. Without it, driving a new car might be an unachievable dream – especially with the cost of buying an EV so high. However, after agreeing the initial monthly payments with your lease provider, it’s important to remember that there will likely be some additional running costs. So, what exactly are those costs and what are they for? Here’s everything you need to be aware of to help you with your budgeting.
A reservation fee is quite common with car rentals, but less so when it comes to leases. If your lease provider does charge a reservation fee, it’s likely to be nominal, and chances are it’ll be refunded once the car’s been delivered. This is often around the £100 mark, but can vary.
Initial rental payment
An initial rental payment is the very first payment you’ll make, and it affects how much your monthly payments will be. The larger your initial payment, the lower your subsequent monthly payments will be. This is decided between you and the finance company.
The initial rental payment is usually taken within the first two weeks following the delivery of the car.
The second payment you make, following the initial rental payment, will be the amount you agreed to pay each month. These set payments will continue every calendar month – on the same date – until the end of the contract.
Maintenance and servicing
If your lease is short term, then maintenance and servicing are likely (and hopefully) nothing you need to worry about because of how reliable EVs tend to be. However, many leases are between two and four years, which means there’s a chance this will eventually apply to you. Remember, you need an MOT certificate every year once the car passes its third birthday.
Lease providers can offer you a maintenance package which will help spread the cost of an MOT, as well as regular servicing and some repairs. This can be added to your monthly rental cost. If you choose not to, it will be your responsibility to make sure the car is safe and legal to drive – including associated maintenance and MOT costs.
However, if your lease agreement is less than three years and you lease the car from new, an MOT isn’t something you’ll need to worry about.
Processing and transaction fees
Some providers charge a processing and transaction fee, which covers costs related to marketing, sourcing and processing the agreement. This fee will usually be in the region of £200-300, and won’t be applied if your application is declined. Whether a processing and transaction fee is applied is something you’ll need to confirm with the provider directly.
Excess mileage fees
Before you sign on the dotted line, you and the provider will agree to a maximum mileage limit. This is usually broken down into monthly miles – for example, you may agree not to exceed 12,000 miles per year, which is 1,000 miles per month. If you’re unsure about the miles you’re likely to drive – for example, if you regularly commute – this can raise concerns.
If you do travel excess miles, then you’re likely to be charged an additional per-mile fee at the end of the term. This can be anything from 3p to 25p, depending on your agreement. That means, if you’re charged 10p per excess mile and you drive 1,000 miles more than your limit, you’ll be charged an additional £100.
Contract amendment and extension fees
Many see leases as being an unbreakable contract, however they’re not quite as scary as that. It’s true that once you’ve signed your contract you’re locked in, but you can make changes if the need arises – you’ll just have to pay a fee.
Unfortunately, in some instances this fee can be rather pricey. For example, if you need to end your lease early you may be asked to pay up to 50% of the remaining payments. Or if you’re looking to make other changes, you may be charged a standard admin fee – which can sometimes be in the region of £200-300. This can also vary depending on the provider.
Delivery and pickup
Many providers will deliver and pick up your EV free of charge across mainland UK. However, there may be a charge if you live in a certain location off the mainland. This is something you’ll want to check with your provider.
What extras do you have to pay for on top?
So you know what you’re going to be paying each month from the lease provider – what’s next? Here are a few extra payments you’re likely to pay so you can safely and legally drive your newly leased electric car.
With an electric car lease, most providers won’t include insurance, so this is something you’ll have to arrange yourself. You’ll also need to make sure that the insurance is fully comprehensive, as finance companies won’t accept anything less, such as third party fire and theft.
Your cover also needs to begin from the day your EV is delivered and last until the day it’s returned.
Insurance can be a large additional expense, so make sure it’s something that fits within your budget before agreeing to the lease.
This goes without saying, but you’ll need to charge your EV yourself – which of course means this is also an additional cost. On the plus side, it’s more affordable to charge an electric car than it is to fill up a tank with petrol or diesel.
Wear and tear
Wear and tear is a normal part of driving any car – including an EV. As a result, wear and tear is expected, and the provider will know you’re not going to return a pristine car at the end of your term. This should be outlined in your contract.
That being said, if there’s damage to the car beyond reasonable wear and tear, you’ll likely be asked to pay for any repairs.
How much does it cost to subscribe to an EV with elmo?
An electric car subscription is one flat monthly payment and includes everything you need to drive the car from the moment it’s delivered, including tax, MOT, insurance and breakdown cover.
The cost of an EV subscription varies depending on the make, model and miles, but costs start from as low as £429 per month.
For more information on an all-inclusive electric car subscription from elmo, browse our range of electric cars today.
Can you end a lease term early?
Yes it’s possible to end a lease term early, however you’ll be liable to pay a fee – sometimes as much as 50% of the remaining amount left on the contract.
Can you reduce monthly rental with a larger initial down-payment?
Yes, the more you pay as your initial rental payment the less you’ll pay each month for the duration of the contract.
Do you need to insure leased cars?
Yes, you’ll need to arrange your own fully comprehensive insurance which must begin the day the car is delivered.
Do you need a good credit rating to lease cars?
The higher your credit rating, the more likely you are to be approved for a lease. If you have poor or no credit, you may find it easier to secure a short-term lease than a long-term lease.
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