A guide to electric car leasing: is it right for you?

12 October 2023 | Celia Topping

With savings on taxes, running costs, and maintenance, there’s never been a better time to swap out your gas-guzzler for its clean electric counterpart. Eliminating those tailpipe emissions means you’re doing the right thing by the environment, too. As we approach the ban of the sale of new petrol and diesel vehicles in 2035, drivers are increasingly looking to make that all-important switch. 

But electric cars are expensive. Prices have dropped a little, with some EVs almost on a par with their petrol cousins. Even so, you could still be paying several thousands more for a brand new electric equivalent to your current motor. 

Read on to find out how an electric car lease deal could be the way you find the perfect electric car for you, at a price you can afford. 

Electric car leasing in a nutshell

An electric car lease agreement allows you to rent a car for a fixed period of time, for a fixed amount of money per month. Some contracts come with insurance and maintenance included, but for others you might have to pay a little extra.

Leasing means you drive away a new car at the beginning of every lease agreement. At the end of your lease agreement, you simply hand the car back. At this point, you can start a new lease on another EV, or extend the one you have. 

Pros and cons of leasing an EV

Let’s have a look at the advantages and disadvantages of leasing. 

Benefits of leasing an electric car 

Here are 7 good reasons to get leasing: 

1. Get more for your money

Leasing means you’re paying for “usership” not ownership. This means for a reasonable deposit and an affordable monthly payment, you could drive away in a car you could only dream of owning. EVs still have a relatively high initial cost, so leasing brings previously unattainable cars within your reach. 

2. An evolving market

Electric cars have come a long way in a relatively short period of time. Competition for market share is fierce, and there’s an enormous range of options available – from small city runarounds to sleek SUVs and top-of-the-range luxury cars.

Technology is improving fast, range is increasing, and prices are dropping. To buy now might mean your EV could seem old-fashioned in just a few years. The advantage of leasing is you’re always keeping up with the market.

3. Reduced running costs

Charging an EV costs a fraction of the cost of filling a tank with fuel. This, in addition to not having to pay road tax (Vehicle Excise Duty), avoiding certain charges in low emission zones, or the congestion charge in London, means the running costs of an EV are significantly lower than those of a petrol car. OVO customers can charge their car for less than £200 a year1 with our super-low cost EV add-on, Charge Anytime.

4. Don’t worry about losing out on your investment

Firstly, you don’t have to worry about depreciation (the car losing its value over time), because you can just hand your car back once your contract is over. 

Plus, although your monthly fee is partly worked out on the car’s depreciation, the fact is that public confidence in electric cars is growing, and the second hand market is strong. This means electric vehicles are holding their value for longer. All good news for leasers. 

5. Good eco credentials

Going fully electric is a great way to cut your carbon footprint. With zero tailpipe emissions, you’ll be speeding your way to a net zero lifestyle in no time. Enjoy guilt-free driving in style! 

6. Low maintenance

EVs are generally a lot lower maintenance than petrol engine cars, because there are fewer moving parts to go wrong. Most leasing companies will offer you a maintenance package when you sign the contract, so that’s another concern tidily taken care of. 

7. New car, no hassle

For those that enjoy the “lived-in” feel of their slightly battered run-around, leasing might not be ideal. But for the early adopters who want the newest, shiniest, most technologically advanced ride on the block, leasing ticks all the boxes.  

You can start leasing with just a 3 month short term contract. But most contracts last from 1 to 4 years. This means you could potentially have the must-have “It” car of the moment as soon as it comes out. You can often upgrade within your contract, so you might not even have to wait for it to end before switching the old for new – but check the details of your contract, as this isn’t always the case. 

Possible disadvantages of leasing

There are some disadvantages to leasing, but these usually vary from company to company, so it’s worth asking about these before you sign up.

  • Charges for excessive wear and tear
  • Charges for exceeding the given mileage
  • Charges if you want to leave your lease contract early
  • Potential high excess on insurance
  • There can be a high upfront cost

For a more personal account of leasing an electric car, why not take a look at why I decided to lease an electric car, by one of the OVO Team. 

A step-by-step guide to leasing an EV and how it works

Leasing a car couldn't be easier. Follow our step-by-step guide and you’ll be on the road in no time. And remember to read what to look for when thinking about getting an EV before you choose your car. 

  1. Take a test drive. You might not be able to do this from your leasing company, so give your local showroom a call. Like any car, EVs vary a lot, so be sure you get the right one for you. 
  2. Choose your favourite brand and model from your chosen car leasing company. Such as Select Car Leasing, our EV leasing partner. 
  3. Your leasing company will ask you a few questions, about how often and far you drive, and how long you want to lease for. Then you can choose your contract and how much you want to pay upfront. 
  4. Add on maintenance and insurance if needed. Usually you can do this through your leasing company. Sometimes insurance through a dedicated EV car insurer might be cheaper. 
  5. Set up your online payments – and you’re ready to go.
  6. The car could be immediately available, as with many of Select Car Leasing's offers. But sometimes you may have to wait a few days, weeks, or even months, depending on the popularity and availability of the car. 

Is it better to buy an electric car? 

At the moment, leasing seems like a smart move, for the reasons explained above. But there’s a lot to be said for buying too of course. Here’s a quick rundown of the pros and cons of buying an electric car. 

You own the carHigh upfront cost
You can sell anytimeHigh monthly car loan payment
No limits to mileageMaintenance must be paid for once out of warranty
No wear and tear chargesDepreciation means sale value is unknown

It’s really a matter of weighing up what’s important to you. Understandably, owning a car is a very attractive option, but leasing takes a lot of the worries of ownership away. 

In summary: is it worth leasing an EV?

This really comes down to personal preference. If you like to have the feeling of car ownership, which many people do, then maybe leasing’s not for you. But in terms of the many benefits leasing offers, including price and convenience – and always having a new car – then yes, leasing is well worth it.

FAQs about electric car leasing

Sources and references:

  1. The less than £200 claim is based on an average Charge Anytime customer using 2700kWh a year to charge their EV using the Charge Anytime add-on. The rate on 01/11/2023 is 7p per kWh for Charge Anytime. Actual amount for driving for a year is £189. Individual savings will vary based on your vehicle efficiency, driving style and EV charging usage.
  2. The 3p a mile claim is based on an EV customer driving the UK average of 7,000 miles at an average of 3 miles per kWh. The Charge Anytime add-on rate on 01/11/2023 is 7p per kWh. Actual sum per mile is 2.3p. Individual costs will vary based on your vehicle efficiency and driving style.