Leasing or buying an electric car is a bit more complex than a standard gas-powered automobile. People can be unaware of the difference between leasing and buying, forcing them to make quick decisions with no information. A bad decision at the car lot can mean years of wasted money. Should you buy or lease an electric car?
Leasing an electric car is much easier than buying. Of course, each has pros and cons, but inherent design flaws in some cars make leasing a much better option over falling range levels and other shortcomings of the electric car.
Leasing an automobile of any type requires that you do some homework and plot out how the buying decision will color your life going forward. But, don’t let your lack of knowledge force you to make a mistake! Read on and learn why it is easier to lease an electric car than to purchase one.
Why You Should Lease an Electric Car
Leasing a car of any kind can be a bit overwhelming for anyone in the market. You should know what you are dealing with before jumping into the process. Like any significant process, take the time and make sure you have all the documents and approvals you need before heading out to the car lot.
Some reasons why you should lease an electric car
- Depreciation – Buying an electric car means that you are going to lose about 70% of your initial investment. This number has been out there for a while, but as newer technology hits the market, it seems to hang around 60% to 70% as a rule of thumb. This level ruins trade-in value and makes the used market overburdened.
- Benefits – Having a car that is up for lease every couple of years means that the leasing company can offer you more benefits than buying. For example, you could have access to upgrades in electronics or a reduced interest rate, depending on how long you have been with the leasing company.
- Degrading Battery – One of the main reasons the cars aren’t as big on the resale market is that the battery can drop in range every year. Leasing the vehicle allows you to get a new car, with new, improved batteries, on a regular schedule. It also keeps your power range high, giving you the ability to explore with your new electric vehicle.
- Bonus – When the leasing company sets the lease into action, they will often receive a rebate from the federal government. This rebate can be reflected in the price or payment of the auto and works as a bonus payment. Meaning you get more money from the dealer than when you buy.
- New Tech – The electric car market is hurtling along now, with new upgrades and tech coming every year. The cars get better each year with better batteries and more bells and whistles. Leasing an electric car means that you have a chance to upgrade the gadgets, and the car itself, at the end of every lease.
Insurance is mandatory in most states in the US. Electric cars, since most aren’t performance machines, can have a much smaller insurance cost attached. The lack of speed and horsepower will be an excellent way to gauge how much you are going to save over the life of the lease. In addition, slower cars are ticketed less, and the crashes are less deadly.
Insurance can also be a place where you find savings for your wallet. For example, some companies give a special rate to leased electric cars, and you should check with your agent before you dive in and lease the new Tesla or Hyundai Kona. Often insurance brokers could have deals with the leasing company and save you even more time or money.
Why You Should Buy an Electric Car
One of the best pieces of advice to give people who are looking to buy or lease a new electric car is to do their homework. This homework means that the person has checked their lives and the vehicle’s life to see how well the new lease will fit or if it will work at all.
Some of the main reasons people choose to buy an electric vehicle instead of a lease are:
- Ownership – Owning a car is much more comfortable than leasing for some. Ownership means that you can add wheels and tires and other personal upgrades like striping and stickers. Some companies frown on any alteration to their leased cars, and buying saves you the hassle of dealing with their red tape.
- Credit – Building credit while buying a car is one of the best ways to ease your way into the credit score game. Making payments on time is what credit companies want to see. So if you plan on buying a home, you should start with something that shows you can keep up with payments, like a new electric vehicle.
- Deals – Electric vehicles are some of the most sought-after on the market. Companies will sometimes bend over backward to help you get a fantastic deal on one of their cars. Discounts on lower interest rates or decreased down-payments can make the cars much less expensive than people expect.
There’s always going to be blowback from the used car side of electric cars. However, not all models suffer from the dreaded failing battery, and these cars can still be leased. Leasing a used car means that you miss out on some of the innovations of a new model but still get a great car that is good for the environment at a reasonable price.
Leasing a used electric car cuts down on the number of vehicles you can choose from. The companies that do have leases for electric rides are few and far between. That means inventory with these dealerships is often limited to what cars have been turned in on trade. But the leasing companies are out there! You just have to sift through pages of unsuitable rides.
Another thing to consider when you start browsing for your car is the benefits of old vs. new electric cars. Some people get hung up on specific model types and range limits, but several other reasons are checked into new and used electric vehicles.
Some reasons to buy or lease a new electric car are:
- Warranty – A huge selling point for some people is the warranty of the vehicle. A warranty will cover any repairs or upgrades that the car might need and any other services you might need.
- Upgrades – New cars come with all the fantastic upgrades that add a shot of technological wonder into your ride. People like getting the newest types of tech, and new cars always seem to have them.
- Transportation – These days having transportation can be a game-changer for families. The best reason to buy or lease an electric vehicle is for a life that provides for you and your family.
Some reasons you should lease or buy a used electric vehicle are:
- Price – A big draw of a used car is the price tag. Cost can be the most prominent factor in the equation for some folks, and buying or leasing used is a sure way to save money. In addition, prices on used electrics are lower, and a lease could end up costing you only a few hundred dollars.
- Familiarity – Sometimes, it is good to take a step back. Buying or leasing a model that you had before could be a welcome change. Along with the price, knowing how the car works and how it drives and handles can be a comfort to some.
Hidden Benefits of Leasing an Electric Car
Prices in the car market are on a steady climb with no end in sight. People looking to buy a new electric auto can expect to spend upwards of $35,000 for an entry-level electric car. Leasing gives clients the option to try a car out for a while and see if they like it before making a decision on a payment that could radically alter their living situation.
Some hidden benefits of leasing an electric car are:
- Environmental Concerns – Though it seems like the most obvious benefit of owning an electric car, the impact on the environment isn’t a tangible thing. However, if you are conscious about the environment and gas-powered emissions leasing, an electric car can be the way to go.
- Improved Performance – Electric cars are some of the better handling and driving cars on the market. All the rumbling and jostling that an engine creates is gone with the electric vehicle, leading to more time on the road. Don’t let their past fool you; electric cars are quickly becoming faster and with much larger ranges.
- New Gadgets – Tech people, go crazy for electric cars, and it gives them an inside edge on all the new gadgets and upgrades that the vehicles undergo. If having wifi, autopilot, and other gadgets sound like something you would enjoy, look for a lease to keep up with all the hot trends.
- Extra Hours – While there will always only be 24 hours in a day, leasing an electric auto frees up all the time you would spend pumping gas or going in for an oil change. In addition, the lack of fluids in the car will make it a breeze to maintain and will save you hours in the day.
Sometimes the benefits of your lease are full of things that don’t come in the advertisement. Taking the time to talk with a leasing company could reveal many more hidden benefits of leasing an electric car. Major companies always want your business, and talking with them could unlock cars that aren’t usually available for lease.
Buying an electric car is another excellent option. Leasing can be a bit too restrictive for some, and buying is always the way to feel like your money is going towards something. There are good and bad parts about buying, just like with leasing.
Some benefits of buying an electric car are:
- Tax Incentives – There is a $7,500 tax credit for buying an electric vehicle. You can take this credit when you file your taxes, and the government will compensate you for your purchase.
- Roadside Service – When you buy an electric car, you have the option of having a 24/7 roadside service that could come in handy if you depower. This is important because, unlike your insurance roadside assistance, the company comes certified for your type of car and will be able to get you back on the road.
Some drawbacks of buying an electric vehicle are:
- Price – The price of a new electric car can be staggering for some. The payment for buying can sometimes be twice the price you pay for leasing. Keep an eye out for deals and rebates but be aware that new cars will always be more expensive than older models.
- Model Availability – The worst thing about shopping for a new car is that you might not be able to find what you are looking for. Not getting the car you want can be disheartening, and industry shortages are becoming increasingly common.
Some people could be unsure of the difference between buying and leasing an electric car. There are pros and cons to each, and you should know the difference before you go into the dealership.
Think of a lease like renting a new car. You can take the vehicle with you wherever you go, and as long as you meet the requirements of the agreement, you can get another brand spanking new ride in around three years. That means every few years; you get to become the envy of the office with a new slick electric car.
There are going to be a few hurdles that you must clear to get the full benefit of the lease like:
- Mileage Limit – One of the biggest things to do while leasing the vehicle is to keep the mileage under a specific limit. The general rule is that a lease can only have around 30 to 35 thousand miles on it. This leaves enough meat on the bone for the company to sell the car and still give the buyer a decent car with lots of life left.
- No Changes – It would be easy to say no wrecks, but they care more about the vehicle’s upkeep than they do anything else. So it won’t be wrecks but interior problems and issues with the drivetrain and batteries that they concentrate on—also, no drastic color changes or upgrades to the suspension.
- Down Payment – Sometimes, the biggest hurdle for a person to achieve for a lease is the down payment. Not only could there be a solid four-figure up-front investment, but they could also need other hidden fees like registration, etc.
- Accidents – Having an accident could void your lease on the car. Depending on the company, you could be liable for any crashes or fender-benders that you get into. An accident not only could void the lease but will also drag down your insurance or harm your credit report.
There aren’t many things to buy that don’t require you to have good credit. Leasing is also a way to work towards getting better credit or rebuilding it from your past mistakes. The companies have to report your received payment each month to have an impact on your report, so make sure that they do before signing your lease.
Credit in the leasing process is critical to the lease. The company will require you to have a good credit score but having credit with some problems is also okay. However, you should know that having a bad score could mean more money upfront or a much higher interest rate than other patrons receive.
You should understand that leasing an electric car is not going to be the right fit for everyone. Some people could bristle at all the boxes that have to be checked off when returning the vehicle and end up in a hole financially. If you are one of those people who like to make your car your own, leasing could be out of the question for you.
The Best Electric Cars to Lease
The type of car that works best for you is going to depend on your taste. The best electric vehicle for you to lease could not fit into these categories, and you should be ready for that. Choosing the best electric car to lease is going to depend heavily on the company providing the lease.
Before going out to shop, you should also understand that some companies won’t have the exact car that you want for lease. Find something you can afford, and that fits your needs. You might have to do your homework or get out there and hit all the car lots until you find the right place for you and your family.
The Chevy Bolt is one of the most highly rated models on the market. It can be leased for three years for around $250 a month. However, you will also need to slap down about 10% in downpayment fees, anywhere from $3,000 to $3,500. They are compact-sized cars but have tons of extra storage in the front and rear of the vehicle.
The Bolt is the flagship electric car produced by Chevrolet. Chevy was late to get into the electric game, but the Bolt shows their immense progress. Range of 250 miles and comes in nine striking colors. It has a great fan base that loves the vehicle’s power, and it can make the 0 to 60 run in 6.5 seconds, meaning it moves excellent for an electric vehicle.
One of the better-known car companies in the EV game is Hyundai. Over the last few years, the company has produced some top-notch e-rides, and the Kona is the SUV of your electric dreams. It hits the industry benchmark of 250-mile range while keeping the car under $400 for a 36-month lease.
The Kona is an excellent example of how Hyundai has brought up the level of their electric game. Unfortunately, you don’t see many midsize SUVs that can equal the power and efficiency of the Kona while remaining under the $400 payment limit. Kona’s are great cars for active families as they have a bit of off-road capacity for camping or hiking.
Tesla Sets the Standard for Leasing an Electric Car
When it comes to the best electric batteries and motors in the car, it’s a Tesla. The Model 3 is powerful enough to go from 0 to 60 in 3.1 seconds and has an all-wheel drive. The batteries that the company produces are some of the best on the planet, and their cars have become some of the hottest leases on the market.
You don’t often hear of an electric car that can top 160, but the Model 3 is capable of hitting 160 and comes with a lease price of around $400 a month. The biggest downside is that there could be a wait time on newer models, and you could have to shell out around $6,000 for a down payment.
BMW Has an Excellent Lease Program for the i3
Not to be outdone by its competitors, the BMW i3 is a fantastic compact electric car with an equally outstanding lease. You can get a three-year, 30,000-mile lease for around $300 a month. The $3999 down payment is the lynchpin that will make one of these nifty hatchback electric cars yours for a time.
One of the great things about leasing an electric i3 is the ability to get new upgrades. As the software for the car is upgraded, you will go in, like a regular service appointment, and have your car upgraded to the new company standard. These upgrades can include traffic jam assistance and even ambiance lighting for the inside of the car.
The line of Audi e-Tron electric vehicles is great for anyone looking to lease a high-end automobile. They have a wide selection of cars at the three years or 30,000 miles that can start with a low down payment, around $400, and can balloon up to $1,000 a month for the payment. Audi makes amazing cars that cost amazing prices.
The Q4 e-Tron vehicle is one of the hottest leases in the Audi stable. It comes in both hatchback and standard models that are great for families on the go. The models are also known for being able to charge anywhere with speed and efficiency. In addition, some upgrades allow you to charge in the home within a matter of hours; it just involves tons of work by electricians.
You wouldn’t think that Jeep would come out with an electric vehicle, much less a Wrangler-style body. However, the Wrangler 4xe is an electric vehicle with just as much power as the base gas-powered models and comes with the standard level one home plug-in. There is also an option to have a level two charger installed that charges the car in around two hours.
The 4xe is not going to leave you hanging in the range department either. They have a range of 470 miles which equals about 49 miles per gallon if you were using gas. That’s a fantastic range for a full-size SUV. It’s also amazingly quiet, which gives your trail rides a wildlife watching aspect that other Jeeps don’t have.
You can lease whatever kind of 4xe they make. Jeep is trying to get the product out on the market to as many people as possible. So they allow you to custom make your Jeep 4xe online and have it delivered to your nearest dealer. You can nab one of these electric stallions for about $279 a month with $3,000 down.
It is much easier for the consumer to lease an electric car. They have several stipulations regarding functionality and looks that have to be met. Still, the leasing company gives you an excellent car with a smaller payment that helps you build credit and provides you with an excellent quality electric car that could have all the bells and whistles.
Some people could have a hard time with the terms of a lease. Just make sure that the exterior and interior of the car are kept in as close to new condition as possible and that you don’t go over the allotted miles, and you will be fine.