Are you considering the shift to an electric car, but you’re not quite sure if it’s going to be the right fit for you? Opting to lease rather than purchase may offer a practical solution. If you decide to lease an electric car, you transfer ownership risks – like depreciation and fast technological changes – to the leasing company. You can also benefit from the lower upfront costs and predictable monthly costs that leasing offers, giving you the flexibility to drive different models without the stress of long-term commitments.
To help you make this decision, let’s take a look at the three key reasons why electric car leasing is less risky than outright buying an EV.
1. You Avoid Depreciation Risk
One of the biggest concerns when purchasing an electric vehicle (EV) is how quickly its market value depreciates. EVs, unfortunately, lose their value much faster than their gasoline counterparts – also known as ICE (Internal Combustion Engine) vehicles – particularly in the first few years. Some studies show EVs can lose as much as 40-59% of their value in the first five years, which is much higher than the industry standard for the average ICE cars. This depreciation is mainly due to rapid advancement in EV tech, especially when it comes to batteries. Newer models charge faster and offer longer ranges, making the older models feel outdated in a much shorter period of time.
When you’re leasing an EV, this depreciation risk is not something you have to worry about, as the value of the car is not your concern but that of the leasing company. Your monthly payment will also be calculated based on the expected depreciation, not the final resale value, which will definitely count in your favour.
2. Safeguards You Against Outdated Technology
The pace at which innovation is moving in the EV market is impressive – it’s fast, to say the least. Each year, manufacturers introduce new models that provide consumers with improved charging speeds, greater range, and advanced features. Just look at the number of new EV models that came out in the last five years alone – from small hatchbacks to large SVUs – the range of EV models is ever-increasing. So, by choosing to lease, you are able to upgrade your car every year or two, depending on your lease agreement, avoiding the issue of being stuck with an outdated vehicle.
3. Battery Concerns Are No Longer Yours
One of the main reasons people have not yet made the switch to buying an EV is because of battery concerns, particularly the replacement costs involved. EV batteries are much more expensive than normal car batteries because they are made from more costly materials, like lithium and cobalt, and have more complex, high-tech components. The good news is that EV battery costs are falling, but for the time being, you can still expect to pay thousands for a new battery. That is, unless you lease your electric car. Again, the responsibility of covering these costs will fall upon the leasing company, not you.
Want to Experience the Latest Technology Has to Offer?
With most of the responsibilities and risks falling on the leasing company, you no longer have a reason not to make the switch to EV. By opting to lease an electric car instead of buying one, you can enjoy the benefits of the latest tech without having to pay large sums of money and avoid the hassle of trying
to sell an outdated EV. Better still, you can save on fuel, and if you are a business, you can enjoy several of the tax incentives the UK government introduced to businesses leasing electric cars.
