Leasing instead of buying an electric vehicle offers an affordable option, and you can have the car you want. When the lease period ends, you simply hand the car back to the owner with no further obligations. Electric cars are quite expensive, which is why electric car lease deals are common these days. After the lease period ends, you can upgrade to a newer electric vehicle model and continue enjoying the benefits of electric motoring.
Besides, the lease company can help you find the right electric vehicle that perfectly fits your life and supports you in the entire lease period. This article highlights how leasing electric cars works, the need for leasing, and the reasons electric car lease deals are more popular than buying.
How Does Leasing an Electric Vehicle Work?
To lease an electric vehicle, you should first select a leasing company of your choice. You should then select an electric car of choice on the market and decide the best terms of the lease and the mileage estimates. You can ask for help from the staff. Once you choose the vehicle, you will receive a personalized quote based on your situation. Before ordering the electric vehicle, the company will inform you how long it takes for it to arrive from the manufacturer. Once the lease is in effect, you can send monthly consolidated invoices for all maintenance and funding needs.
Benefits of Electric Car Lease Deals
Things to Consider
Is There a Need for Leasing an Electric Vehicle?
Leasing instead of buying a car is not for everyone. However, it is a smart choice if you are thinking about getting an electric car. Leasing is growing in popularity and now makes up about 30% of all new car sales. However, according to Bloomberg New Energy Finance, electric car lease deals are about 80%, although this excludes cars made by Tesla. Instead of leasing, Tesla sells directly to consumers, and the company doesn’t report lease data.
The consumer preference for leases is fueled by the demand for battery-powered vehicles on the used cars market. This is because of the public policy meant to spur electric car adoption, and buyers of pre-owned cars do not enjoy incentives offered by federal and state governments.
The high rate of electric car lease deals is also fueled by new and upcoming models that will exceed today’s electric car capabilities and value. Therefore, it is preferable leasing it now, as you can replace it in just a few years time as per the deal. The bet on fast-paced improvements makes sense. In the last couple of years, battery prices have fallen significantly as factories scale up and engineers perfect the packaging of cells. Essentially, if you look at what can happen in the lifestyle of a lease, you are in fact talking about doubling the range of these vehicles. If you lease, you'll enjoy all these improvements.
In three years, electric cars will be cheaper, and so it makes sense to choose to lease for now. It is very cheap leasing an electric car. According to Bloomberg New Energy Finance (BNEF), 80% of fully electric car drivers lease their cars and 55% of plug-in hybrids (PHEVs) are leased for just a low price. You can never have a better deal than that.
Besides, electric vehicles depreciate in value very fast. If you plan on selling, you will sell it much cheaper than the buying price. For instance, according to Black Book, electric cars that were sold in 2014 are now worth about 23% of their original sticker price as compared with 41% in non-EVs. Another issue is that nobody, even the engineers, knows how well the first wave of electric cars will age.
Why Electric Car Lease Deals Are More Popular than Buying
The following are the reasons why electric car lease deals are more popular than buying:
You’ll Avoid Steep Depreciation
If you buy an electric car and decide to sell it at a later date, its value will have depreciated significantly. In fact, according to Edmunds, the average depreciation of electric vehicles in 2016 was approximately 52% from the sticker price in just the first year. Cars that lose their value quickly are not good candidates for leasing. This is because the lease payment is based on the amount the car depreciates plus the fees. This means that a car that has a greater depreciation rate will translate to greater monthly lease payments.
However, car makers offset the quick depreciation of electric vehicles and lower the cost of payments by using several methods, including offering low interest rates (this is known as the “money factor” in leasing), offering cash incentives, and raising the residual value (this is how much the car is worth at the end of the lease). The rapid depreciation of electric cars makes electric cars a bargain on the used car market, which is why it is cheaper than buying a new one.
You Will Get Tech Upgrades Faster
Year-to-year changes in conventional cars are usually very minimal. However, the rate at which electric car technology is advancing means that new tech upgrades are common. When you lease, the electric car can be upgraded to a new car every two to three years, which means you’ll get to enjoy the advances in battery durability, their range, along with other improvements.
In addition, new features will become available at a faster rate, and the charging times are increasingly becoming optimized. This means that by leasing, you will get the best technology in the market since leased electric cars are upgraded often.
There Is a High Likelihood That You’ll Scoop Loyalty Bonuses
Carmakers offer conquest and loyalty bonuses so that they keep clients and lure shoppers away from competition. The bonuses are even higher when leasing an electric car compared to conventional cars. This means that as you approach the end of the lease, you have a stronger negotiation position. You will have more options than you would have with conventional vehicles. You can stay with the current brand or jump to a competitor. By staying with the current brand you will be greatly rewarded through bonuses.
You’ll Get More Incentives More Often
Electric car lease deals are incentive magnets. The State and Federal governments seem to reward electric vehicle owners to support clean energy. Some states like California offer you cash rebates when you buy an electric vehicle. In most cases, electric vehicle car makers also offer leasing specials like cash bonuses to reduce the process of the electric car so that the lease payment is more affordable. The cash rebate significantly reduces the monthly lease repayments.
Electric Vehicle Battery Quirks Are Not Your Problem
The electric vehicles run on lithium-ion batteries, which are relatively new. There isn’t a lot of information on how long they can last and how it will take for them to stop holding the full charge. This raises the question of degradation and what is covered under the warranty of buying an electric car. For example, the potential for battery degradation of the Chevy Bolt EV is up to 40% within 100,000 miles or during the eight-year warranty.
If you lease an electric car instead of buying it, you will be able to avoid issues with battery degradation. If you lease an electric car for just three years with the typically included 36,000 miles, degradation of the lithium-ion battery will be minimal.
Electric car lease deals are growing in popularity. The consumer preference for electric car lease deals is fueled by the demand for battery-powered vehicles on the used cars market. New and upcoming models that will exceed today’s electric car capabilities and value also make leasing a better option than buying.
Electric car lease deals are better since you’ll avoid steep depreciation, you will get tech upgrades faster, there is a high likelihood that you’ll scoop loyalty bonuses, you’ll get more incentives more often, and electric vehicle battery quirks will not be your problem to deal with. We hope this article has adequately addressed how leasing electric cars work, the need for leasing, and the reasons electric car lease deals are more popular than buying.