Why lease a Used Electric Car - is it not better to buy one and have something t

Is it better to own a used electric car or lease one?

There have always been strong opinions on finance products for procuring a new car. Moving from a nation of cash buyers to hire purchase to personal contract purchase and then to personal contract hire, the trends and consumer habits have seen the UK’s motoring market go through some changes.

For combustion vehicles pre-2020, the big argument was PCP v PCH; with some customers pushing the narrative that the ability to buy the vehicle after the end of the contract (the Guaranteed Future Value / Balloon), was an integral aspect. However, many contract hire advocates enjoyed the benefits of non-ownership, with all VED included, competitive deals and the ability to hand the vehicle back at the contract end.

However, in 2026 what we buy, or lease, is very much a different proposition. The addition of battery electric vehicles (BEV or EV), made many customers re-think how they would finance the proposition. After 2020, the significant increase in models and vehicle quality made the UK believe that electrification was here to stay. The questions of long-term values, residual values and financial stability had not yet properly entered the thoughts of most EV buyers.

Leasing a used EV - what you need to know

The concept of a lease, or contract hire, is not a new facet. Even pre-COVID, the contract hire and leasing market was awash with incredible combustion options from small hatchbacks to luxury German brands.

In effect, the ability to set a comfortable rental payment for 2 - 4 years was far more secure and certain, as there were no vagaries about the value of your vehicle or the difficulty of having to sell it in the future. Contract hire, which is the strict legal definition, is exactly what it says on the tin; you are taking on a fixed term contract for the long-term hire of a vehicle.

The lease cost is based on the vehicle you want, the annual mileage you cover, your term and the initial rental (deposit) you utilise. For new cars, the advantage is that leasing brokers buy in bulk, which means the level of discount they get on the vehicle is far more than an individual would receive when buying just the one.

Because of the competitive discounts and finance options, the monthly payment will be better than the level of depreciation you would incur on the vehicle if purchased. Ultimately, this all comes down to a game of numbers. In the case of a used electric car, the subsequent advantage is that the vehicles going onto a lease have already had the benefit of these discounts and, because they are 1 - 3 years old, enjoy the price reductions created though depreciation.

On a like for like comparison between a used EV vs a similar new EV, the customer can save some 30-40% on their monthly rental.

With a lease you have the ability to add a comprehensive maintenance package - funder maintained - which ensures the cost of all servicing, maintenance, tyres and breakdown recovery is included. For the more risk averse, this is essential, especially when you are considering a used EV.

Thoughts about a warranty running out or the battery being impacted are almost certainly high on the agenda for concern. With the maintenance package, the risk is undertaken by the finance company and not the customer. Fundamentally, if the car isn’t working or fit for purpose, they absorb this responsibility.

As the quality and technology within an EV is advancing so much, a lease of 2 - 3 years is a great way to change in keeping with the vehicle and battery updates. With every year, new vehicles with incredible range, driving autonomy and technology are going onto fleets and company car schemes. After 2 - 4 years, these amazing EVs need drivers on used programmes.

However, you do need to know that if you really enjoy your vehicle, you cannot buy it. Nor are the payments you are making going to reduce the value of the vehicle if the funder does consider selling it.

Should you not enjoy the vehicle during the term, you cannot simply return it. You must enter into a process called Early Termination, which means paying a sum to return the vehicle. Just because the asset is used, doesn’t mean that the finance product is any less strict and rigid.

Buying a used EV - what you need to know

For the last 2- 3 years, the used EV industry has been a tough and uncertain one. We cannot be surprised by this, with the mass-adoption of new cars only taking off in 2020. This means until 2022 / 2023, the concept of a used electric car, or van, was a little bit alien.

The picture is very much different in 2026 where we are now seeing searches for a BEV grow. The demand to move into a pre-owned electric asset is very much here, which says that confidence has also arrived .

For many UK customers utilising a hire purchase or contract purchase is a likely route on a used option. While there are differences between them, especially with set balloons v guaranteed future value, the underlying approach is that this is a way in which you can own the asset. Unlike the lease, the V5 / logbook is in the name of the driver and the finance is being paid off to allow for ultimate ownership.

With the advantages of a lease, there may be questions as to why would you want to buy the vehicle? With the improvements in EV tech, many 2- 3 year old vehicles have a range, charging capability and tech which more than suits the driver for the long-term.

In addition, with research showing that a battery degrades no quicker than a combustion option (about 2% per annum), the long-term viability is there for the vehicle. Low service and maintenance costs too mean that most aspects, save for the battery, are affordable to repair or resolve.

The main advantage of owning your vehicle, after paying off the finance, is the flexibility. This is your vehicle and you can sell it, modify it or do with the vehicle what you wish. With a lease, you are subject always to the restrictions of the funder. As an EV is proving to be robust in the long-term, this means that you benefit from a decent vehicle which you can run cheaply after the payments are all made. With the rising cost of living, is this not an attractive thought?

However, with the reward of flexibility comes the risk of reliability and value. The stability of used EVs is not yet there and you may be paying for an asset which is depreciating more quickly, and harshly, than the cost of a lease would have been. While you might own it at the end, the big question is how much is it really worth? Will it be a saleable asset in the future if EV tech and battery innovation continues?

Always consider and research your options before making any confirmed commitment.

In terms of the used EV shown here, Volvo C40 ESTATE 170kW Recharge Ultimate 69kWh 5dr Auto (Pure Electric Vehicle), this is based on the following specification:

Crystal White Premium metallic paint
Connect textile/microtech - Charcoal

Volvo C40 ESTATE 170kW Recharge Ultimate 69kWh 5dr Auto Used Electric Car Lease

20" 5 spoke diamond cut black alloy wheels
Mode 3 / Type 2 Charging Cable (Public Charging & home wallbox charger – Fast charging)

What does the Ultimate add to the Volvo C40 ESTATE 170kW Recharge?

(Single and Twin Motor) – from £56,700 - £61,950 when brand new, this car adds Connect suede upholstery, Harman Kardon Premium Sound, 20” alloy wheels, humidity sensor, 360-degree camera, keyless drive and power driver’s seat and memory. A very high spec EV option!

So how does the Volvo C40 perform?

Recharge Single – this 67 kWh lithium battery delivers 170 kW (or 228hp) for 0 - 62 times of 7.4 seconds and top speeds of 99mph. The combined real-world range is 175 miles in colder weather and 230 miles in warmer climates. Charging times based on the 11 kW AC max are 7 hours 15 minutes for 0 – 100% with the 133 kW DC rapid charge delivering 30 minute 10-80% times.