If your next car is an EV, is it better to lease or buy it outright?
When it's time for a new car, you have two options - buying or leasing. The same is true when you're looking at an electric vehicle (EV) - is it better to buy that Audi e-tron you've had your eye on, or lease it? Each option has its own benefits and drawbacks but when considering the higher starting prices of the best EVs, is it better to lease rather than buy an electric car? It certainly warrants a closer look.
When you purchase, you pay it off over a set period in monthly installments, then take ownership of the car, after which it belongs to you completely. When you lease an electric car, you're essentially renting it. So, in terms of leasing vs buying a car, your monthly payments are lower when leasing, but you have to give the car back afterward and start a new contract.
When you lease an electric vehicle, you rent it for two to four years. This gives you the opportunity to always drive the latest models, but it never becomes your property. But, while you never have to worry about selling or trading in, you may also find yourself spending more in the long run on perpetual leases. However, there is more to the discussion than simple numbers when it comes to deciding whether to lease or buy an electric car.
How Does Leasing An EV Differ From A Traditional Vehicle?
So you've seen that electric car for lease from a local dealer and the deal looks good. Should you do it? Probably. Leasing can be great for an internal combustion engine (ICE) car, but you need to know how EVs are different. Several factors come into play that make leasing an electric car the best way to acquire one right now. It might not matter much for ICE cars, but when it's buying versus leasing for EVs, there are some very noticeable differences.
Here we compare the advantages and disadvantages of leasing an EV:
If some of these are deal-breakers, you could consider buying that EV, but this has its own set pros and cons, too:
Whether you choose to buy or lease an EV, there are numerous benefits and trade-offs to consider. However, there are slightly more advantages to leasing it. This may change in the future as tax credits eventually fall away and EVs become cheaper and more widely accepted. Right now, leasing is the more sensible option for most. Use an online calculator (there are many) and do the math to see for yourself how much your monthly payments will be.
An EV revolution is upon us and, to take advantage of the slew of new EVs entering the market, leasing is the best way to experience a new one every few years. Importantly, it lowers the cost of joining the EV movement and makes it possible for more people to 'go electric'.
EVs have fewer moving parts than traditional combustion or hybrid vehicles, and their electric motors are very reliable. As such, they don't wear out easily and require less maintenance. The fact that their batteries carry 200,000-mile warranties should give you some idea of how long they last. For this reason, buying a recent-model used EV car is low-risk.
There is a reason so many automakers are focusing on this segment of the market. It is our zero-emission future. Range and charging concerns will diminish over time and ICE cars will eventually die out.
Though the technology behind EVs isn't overly new, making it viable for mass production is. As such, these vehicles are naturally more expensive than their more commonplace contemporaries. However, the technology will become cheaper as it scales up in volume. Several automakers are working on sub-$30,000 EVs. In the meantime, you can buy an electric car used, if you want to save a few bucks.