About Electric Car Leasing

What is Electric Car Leasing

“Leasing” is a generic term which is commonly used to describe contract hire (please be aware that “leasing” can sometimes be confused with other financial products like Personal Contract Purchase – PCP).

Business contract hire, or BCH as it is known, is suitable for those businesses (sole trader, partnership or limited company) who wish to use a specific electric car for a designated period of time.

The eCarLease UK team will introduce your business to finance companies who generally offer fixed term contracts between 24 and 48 months. Leasing is not a flexible product and the term you elect to go for is a fixed term; you cannot hand the car back at any time without a cost consequence.

Mileage can be set at anywhere between 5,000 and 50,000 per annum (vehicle and finance company dependent). With EVs we will look at mileage as part of suitability assessments. For high-mileage drivers we need to ensure that the vehicle is fit for purpose. With mileage, it is important to set this accurately as you will charged for any miles you cover beyond your contract – this is known as excess mileage charges.

Contract hire is not a purchase style product; in our industry we refer to it as a usership product, in that you use the vehicle for the term of the contract and then arrange for this to be collected at the cessation.

What are the advantages of leasing an electric car?

• Fixed period of car usership ranging from 24 to 60 months – you decide how long you need to use the car and build a contact which meets your needs and requirements;
• Option to include a maintenance package – while our advertised rates do not include maintenance as standard, you can add this to your contract in order to cover the cost of all routing servicing, maintenance and tyres. This means you only need to organise insurance and charging;
• Low initial rental (no deposit) options available – the initial rental is not a refundable deposit. This forms part of the finance and so you can decide how to structure the arrangement i.e. small or large initial rentals. For some businesses the ability to protect cash-flow is paramount. Leasing allows you to avoid any upfront commitments;
• Leasing is a tax efficient product – monthly rentals can be offset against taxable profit. If you are VAT registered, you can claim up to 50% of the finance rentals and 100% of the maintenance rentals;
• Company car tax – from April 2020, the 0% BiK rate for EVs present a huge cost-saving for the individual company car driver. For the first time in a number of year, it is possible to have a FREE company car; and
• No depreciation concerns – one of the biggest fears with leasing an electric car is that they will lose value quickly and they are not a long-term solution. To manage this risk, contact hire offers a safe and risk-free way to run the vehicle. Regardless of the end value, the vehicle is retuned to the finance company for disposal and is not a risk to the company.

What are the disadvantages of leasing an electric car?

• This is not suitable for those businesses who wish to own a vehicle; leasing is not an ownership product – if electric cars continue to grow in popularity, those businesses who undertake a purchase-style product may benefit from any potential equity in the vehicle;
• You will be charged for damage that is not acceptable under the BVRLA’s Fair Wear and Tear Guide (available upon request) – if you have a driver who is not careful with your company vehicles, you at risk to being charged at the contact end; and
• You will be charged an excess mileage rate for any mileage above your contracted rate – if you are not sure of your mileage or you go well beyond the contact, your business will be charged.