No-Deposit Electric Car Leasing - is this a possibility for me or the business?

Is it possibile for me or my business to have no-deposit electric car leasing?

How you wish to fund your new, or used, electric car is very much a subjective decision. And one which you should always consider and review with your family, colleagues or accountant (as the case may be).

From cash purchase to hire purchase to contract purchase to contract hire / leasing to subscription, there are a variety of ways in which you can procure or use your BEV. With yesterday’s King’s Speech  which promises some updates and reforms to the UK, we are likely to see an ever bigger uptake for electric vehicles in the UK.

One of the big takeaways from this is the need to make Britain an energy superpower by 2030 (in-keeping with the ZEV Mandate ambitions). A new Bill, the Great British Energy Bill, will push us towards energy security and independence, as well as provide a more stable infrastructure for the EV drivers of the present and future.

Some of the noted concerns around the move to all-electric is the availability of resources for public charging. There has been considered critique of local authorities and councils in their approach to planning and working with operators to organise infrastructure and hubs.

What is probably not made clear enough is the investment needed to install and innovate charging solutions. To encourage entrepreneurial behaviour and local investment, this does need fairer policies to help more external companies establish solid charging facilities.

The foremost option we offer to both our personal and business customers is contract hire (leasing). This is very much a product which does what it says on the tin, with there being a fixed term contract for 2, 3 or 4 years based on your annual mileage.

The reason it works so well in this sector is that as a usership product, there is no obligation to own the vehicle or undertake the risk of depreciation.

Market volatility has certainly impacted the battery market, with many manufacturers having to increase discounts / decrease list prices to help stimulation. Pricing uncertainty has rendered some customers and finance companies financially vulnerable.

Without getting into a tax conversation, those customers who pursue purchase products in the company car sector for heightened tax benefits have been hit with losses at the point of sale. To be clear, the lease arrangement allows you to use the car for the length of the contract and return this at contract cessation.

Vehicles like the upcoming Ford Capri EV are therefore likely to be even more popular on this style of funding compared to the traditional hire purchase and contract purchase routes which consumers and companies adopt.

But is leasing without a big deposit possible?

The topic of deposit and payments is not uncommon in any of the transactions we undertake with our UK customers. In our industry we don’t actually say deposit, as this is not a purchase product or some figure which is returned at the end of the contract.

Indeed we use a term called “initial rental” to qualify what many would refer to as a deposit. On the e-car lease website, you will note that the initial rental is a flexible entry which enables a customer to alter; we show 1 / 3 / 6 / 9 / 12 on our contract builder. If you select a 1, or 1 spread, this is how we reference the “no deposit” arrangement. In doing so, you will notice the monthly price for vehicle changes.

However, does this mean that no-deposit is more expensive than a contract with a big deposit?

Not so for a lease. Unlike the traditional methods of finance, the product is not overtly interest-led, in that the amount you are paying is effectively dictated by a deposit. With contract hire, the annual mileage and the term you decide upon will have a total amount payable.

How you elect to pay this amount is a personal decision and will be controlled by the initial rental. So for an example, if you take a contract which is 2 years and 5,000 miles per annuum you can elect to take the following three options:

•  9-Spead initial rental - Monthly price of £277.27 / Deposit of £2,499.48 / Total Amount Payable £9,187.04;
• 3-Spread initial rental - Monthly price of £341.81 / Deposit of £1,025.43 / Total Amount Payable £9,187.06; or
• 1-Spread initial rental (No Deposit) - Monthly price of £370.29 / Deposit of £370.29 / Total Amount Payable £9,186.96

As can be evidenced above, the initial rental clearly impacts the monthly price you pay on your lease. However,  the overall amount you are paying will remain fairly static.

So for upcoming Ford Capri Electric customers, there will be a choice in what capital outlay and commitment they wish to make. The rationale behind a no-deposit arrangement stems from the company car market, where many businesses will only operate fleet and salary sacrifice on this basis to preserve cash-flows and ensure consistency / fairness across the employees.

If you use a big initial rental to subsidise a rental, you are not presenting a wholly fair analysis. In the personal car lease market, the lower deposit helps ensure the proposition is affordable for the duration. Every 2- 4 years, you have to question if you will have sufficient capital to keep making a big deposit.

So if you do want to pursue an amazing EV like the  Ford Capri  , just head to our deals page to help create your bespoke arrangement.

But how will the new Capri perform?

As per below, three battery configurations are available:

•  Standard Range RWD – this RWD lift-back saloon will have a 52 kWh usable battery which will offer 0 – 62 times of 9.0 seconds, 99 mph top speeds and 125 kW (or 168hp). Expect a combined winter range of 160 miles with warmer weather allowing for 220 miles – a 190 mile combined. On charging, the 11 kW AC max will allow 5 hour and 45 min 0 – 100% charging times with the 115 kW DC maximum allowing 33 minute 10 – 80% times. A cargo volume of 572L is available with this car. It has a vehicle fuel equivalent of 148 mpg. You can tow with this option - 750kg (unbraked) and 1000kg (braked). It also has no V2L or V2G capabilities. The Heat Pump is available (as an option);

•  Extended Range RWD – this RWD lift-back saloon will have a 77 kWh usable battery which will offer 0 – 62 times of 6.4 seconds, 112 mph top speeds and 210 kW (or 282hp). Expect a combined winter range of 235 miles with warmer weather allowing for 320 miles – a 275 mile combined. On charging, the 11 kW AC max will allow 8 hour and 15 min 0 – 100% charging times with the 135 kW DC maximum allowing 28 minute 10 – 80% times. A cargo volume of 572L is available with this car. It has a vehicle fuel equivalent of 145 mpg. You can tow with this option - 750kg (unbraked) and 1000kg (braked). It also has no V2L or V2G capabilities. The Heat Pump is available (as an option); and
•  Extended Range AWD – this AWD lift-back saloon will have a 79 kWh usable battery which will offer 0 – 62 times of 5.3 seconds, 112 mph top speeds and 250 kW (or 335hp). Expect a combined winter range of 230 miles with warmer weather allowing for 315 miles – a 275 mile combined. On charging, the 11 kW AC max will allow 8 hour and 15 min 0 – 100% charging times with the 185 kW DC maximum allowing 26 minute 10 – 80% times. A cargo volume of 572L is available with this car. It has a vehicle fuel equivalent of 145 mpg. You can tow with this option - 750kg (unbraked) and 1200kg (braked). It also has no V2L or V2G capabilities. The Heat Pump is available (as an option).

For more help or advice on no-deposit EV leasing, don’t forget to call our expert term at e-car lease on 01942 910 001 or email at [email protected]

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