Electric Car Leasing | What to Know

If you are looking to lease an electric car, then you may be a little bit overwhelmed or a little stuck on where to start. That is why we have written this guide about electric car leasing to help you figure out if this is the right option for you.

As with anything in life, there are pros and cons. So, it is important to consider these options for yourself personally and how they affect you. 

What Does Leasing an Electric Car Mean?

At its crux, car leasing is a fancy term for the long-term rental of a new car from a car dealership. The deal can either be an agreed amount of time or for a certain amount of miles.

Unlike other options such as monthly payments which sum up to complete ownership of the vehicle, car leasing means that you return the car after the lease is finished. You will not own the car.

However, some dealerships will offer a clause that allows you to pay the remaining balance of the car’s value, meaning that owning the car is possible at some dealerships.

What Are the Benefits of Leasing a Car?

The number one benefit of leasing a car over other options available is that the monthly payments to the dealership are considerably lower. This means that this is a good option if you are on a tight budget and do not want to put all your money into an older vehicle which may not be as reliable.

It allows you to drive a new and reliable car for less, which may not have been an option otherwise.

If you always want to drive the latest model of a car and do not want the hassle of having to buy and sell your car every two to three years then leasing is also a great option. 

Since cars depreciate in value so quickly and new models are typically unveiled every couple of years, leasing allows you to simply upgrade your car to the newest model upon release (regarding your lease expires in time).

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Of course, you will simply be driving the latest model, you will not own the latest model.

If you are self-employed, you will also be able to write the lease expenses off of your tax report, meaning that the cost of the company vehicle will be easily manageable. 

What Are the Disadvantages of Leasing a Car?

The biggest disadvantage of leasing a car is that you are renting it. You will not own the car that you are driving. So, just like when renting a house you will have nothing to show for your money once you decide to move on. It is not an investment.

This means that you are likely to pay more money for leasing a car than you may have spent after buying the car outright. 

Although these payments can be considerably larger, you will own the car at the end of the agreement. This would allow you to sell the car and recoup some of the costs. 

Also, your leased car cannot be customized. If you prefer a new sound system or a new coat of paint, this will not be possible. After all, the car is not yours, it is the dealership’s car.

If you find that you drive long distances either for work or simply for pleasure, then leasing a car may not be the best option for you as often a lease agreement will have a clause stating the mileage limit over a certain time. Any excess mileage over this agreement amount may result in extra fees, meaning that your cheaper monthly payments may not be cheaper after all!

Why Should I Lease an Electric Car?

Typically electric cars depreciate in value quicker than their gasoline

 or diesel-fuelled counterparts. So, instead of buying an electric car, with which option you will lose money faster, you can simply lease it.

This way you can rest assured that you hold no responsibility for the lost money. This will fall solely on the dealership. You will not bear the brunt of the depreciation while enjoying a brand new electric vehicle. 

Basically, by choosing to lease an electric car rather than buy one, you are removing yourself from any downsides associated with choosing an electric car over a gasoline/diesel-fuelled car.

So, Is Leasing an Electric Car Right for Me?

By looking at all of the pros and cons listed above you can get a pretty good idea of whether or not leasing an electric car is the right option for you. You can take into account your finances, your situation as well as how often you like to update to the latest model.

So, say you have decided that you want to lease an electric car, what next? Well, there is still one major thing to consider and that is your credit score. Your credit score will affect whether or not a dealership will offer you the lease. If you have a decent credit score, then this will not be a problem. 

However, if you have a bad or even non-existent credit score then you may well be rejected from leasing a car. the other option is that you may have to pay a higher premium on the lease and you will end up paying more money in the long run.

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Susan

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