Is leasing an electric car a good idea?

Is leasing an electric car a good idea? And is it good value to lease one personally as a consumer?

The EV project has perhaps been a more complicated one in 2023; comments by the mainstream press and media, along with a couple of “celebrities” have suggested that lithium-ion battery tech might not be the solution for our 2030 automotive ambitions (and beyond). Will we revert back to petrol and diesel format?Is hydrogen car leasing one for the future?

The truth is that for commercial and “bigger” transport, this might end up being the case but for cars and smaller vans, there will be no deviation or compromise at this stage. Putting it quite frankly, we are all too far down the road in terms of investment, infrastructure improvements, production and automotive culture. Regardless of opinion - including Rowan Atkinson suggesting he “feels duped” - the political, economic and social momentum is there for all-electric solutions.

And in the recent SMMT stats you can see that vehicle registrations are not slowing down. In May 2023, 24,513 EVs were registered, compared to the 15,448 from May 2022! As at today, the UK has amassed over 120,000 new electric car registrations during 2023, which is 31% more than 2022. It would be no surprise that the Tesla Model Y is the 7th best-selling car in 2023 … with just over 14,000 now registered!

So what is leasing and why is it so popular?

The true name of our core financial product is called Contract Hire. Not unlike its description, this is simply a long-term agreement to hire a vehicle. This is not a purchase style finance product, so it is unsuitable if you or the business want to buy the vehicle at the end of the contract.

Contract hire and leasing has really evolved with BEVs because of the “usership” aspect of the finance product. If the car depreciates more quickly than you would have anticipated then this is of no concern or consequence to the customer, as lease cars are simply collected by the finance company at the contract end, where they are then disposed of at auction.

The risk and reward is therefore with the finance company / lessor, as opposed to the end user. In the same way, if the EV is particularly valuable at contract cessation then the benefit will be enjoyed by the finance company too; no additional value or equity is passed across to the customer.

How do I get a quote for a lease?

Many customers will often ask the e-car lease team “how much is x electric car per month?”. Now the answer is somewhat long-winded because of the nature of the product. There is no set price for a lease, as the entire contract is built around you or the company needs. For example, we need to know:

•  Are you a personal or business customer - this isn’t about the price in every instance (although you do get business ONLY deals), this is more about how the process will be carried out and the type of quotation you receive;
•  Contract Term - this is not a short-term solution and is really a replacement for purchasing a new EV. We often ask customers to select 24, 36 or 48 months, although 60 months is available upon request. Commonly, the longer the contract the cheaper the rental BUT as a fixed contract, you can only end it by Early Termination. This involves paying half of the remaining rentals to return the car to the funder, so ensure you choose your term in accordance with the needs and requirements. Most customers will go for 36 months / 3 years, as this will be consistent with the manufacturer’s warranty;

• Initial Rental - the payment, or rental, you make in month 1 is known as the initial rental. In “car speak” you would say this is a deposit but, as you do not get this amount back, we don’t use that phrase as commonly as a dealership. With leasing, the overall cost of the agreement is the same regardless of whether you pay a higher or lower initial rental. Some customers prefer a lower monthly rental, so will pursue the bigger deposit whereas as others prefer a steady no-deposit style deal. Using the e-car website, you can quickly ascertain the figure by adjusting the initial rental between 1/3/6/9/12 - just note the initial rental / monthly rental changes;
•  Annual Mileage - crucial to all of this is the distance you are likely to cover each year. With contract hire largely being based around the rate of depreciation, it would be no surprise to our customers when we say that the more mileage you cover, the more expensive your contract will be. While mileage should be key to your EV selection (use our range calculator to assess product suitability), it is also going to influence your budgets and aspirations. Choose between 5,000 - 20,000 on our website or enquire with us directly to ask for more;
•  Maintenance - all of the e-car lease prices are based on driver-maintained contracts and so presume that you, as the user of the EV, will service and maintain this in accordance with the manufacturer recommendations. Just because an EV will often need fewer services or maintenance compared to combustion, doesn’t mean that it requires none at all. If you don’t get this aspect carried out correctly, it can impact negatively on you. A warranty protects a driver against a fault which has arisen through no fault of their own but not against negligence or instances where you are remiss. For an additional cost per month, ask our expert team for a funder-maintained quotation. This ensures all the servicing, maintenance, tyres and breakdown recovery is included for the duration of the contract; and
• Charge Points - whether you are a personal or business lease customer, you need a charging solution. For domestic customers we will direct you to Rightcharge (https://rightcharge.co.uk/) and for bigger commercial premises / employers, we will direct you to Raw Charging (https://rawcharging.com/). This needs to be factored into the lease costs, as part of a Whole of Life analysis. 

Leasing an electric car personally, as a consumer, is entirely possible with the e-car team. Of course we understand there are a number of financial and tax reasons for businesses and salary sacrifice customers to pursue this.

For those customers who want to use personal contract hire (rather than PCP or HP), this is completely permissible and for many is the sage thing to do. Electric cars do offer, in some cases, lower running costs when compared to an equivalent petrol or diesel car - electricity is cheaper than fuel and the lower servicing obligations do come in to play here.

Not only that, EVs are great for low-mileage drivers who do city and urban driving with stop/start style driving. And there is the environmental impact which an EV does have in congested areas; zero tailpipe emissions makes for a cleaner and greener air quality. And let’s not forget that all-electric transport is actually fun to drive; quick acceleration, robust handling, impressive specification and great aesthetics. Moving into an electric car is not a compromise. 

And talking of amazing, wonderful and exciting EVs … take a look at this supercar our personal leasing customer is now enjoying!

In terms of the car shown, the Audi E-TRON GT SALOON 390kW Quattro 93kWh 4dr Auto [Comfort + Sound Pack], this is based on the following configuration:

•  Daytona Grey Pearlescent Paint
•  Twin leather - Black with 8 way adjustable sports seats
• Graphite grey paint finish inlays
•  20" aluminium alloy wheels in a 5 twin spoke design in gloss black
•  E-tron sport sound
•  Mode 3 AC charging cable

In terms of performance, the Audi GT EV has an 85 kWh usable battery which generates power of 390 kW (523 hp) for 152 mph top speeds and 4.1 second 0 – 62 times. This is an AWD model. Expect real world ranges of around 220 miles in winter and 295 miles in warmer weather.

Charging times are 9 hours and 15 mins on the 11 kW AC max for 0 – 100% and 17 minutes for 10 – 80% on the 268 kW DC rapid charge max. This luxury saloon has a 405L cargo volume. Expect a vehicle fuel equivalent of 124 mpg.

For more information on the best electric car lease deals just get in touch with the team on 01942 943 208