Article | Guide

What to know about leasing an EV

021 Mar 2024

Leasing an EV can be a great option to get you into the EV world

Leasing an EV can be an attractive alternative to purchasing, giving you the chance to enjoy the latest tech and models with the flexibility that comes from non-ownership. However, before you sign on the line, there’s lots to consider. Let’s take a look at what’s what. And remember: always check the small print with your dealer before committing.

Run the numbers on mileage

To make a choice that’s compatible with your driving needs, have a think about how many miles you usually cover. That’s because leases may span anywhere from a few months for shorter leases to four years for longer agreements, and include a mileage cap based on average driving habits – usually between 10,000 to 15,000 miles per year. Going above this limit could result in a penalty, usually a fixed amount per mile. So, be as accurate as you can about your range and consider adding in a decent extra for a useful buffer, for those times when you might drive more. If you’re a city-dweller with short commutes, leasing could make great sense – but less so if you’ve got a serious case of wanderlust.

Make the monthlies work for you

In the same way you’d budget for car ownership from MOTs to insurance, savvy budgeting is great for leasing, too. Check the monthly payment amounts and the initial down-payment. If you’ve got more to put down in the first place, you might be able to reduce the monthly and accrue less interest in the long run. It never hurts to shop around – manufacturers and dealers may offer special leasing deals with different interest rates. This could make a noticeable difference over the life of the deal. If maths isn’t your strong point, don’t worry - consider using use an online loan calculator to help give you a clear view of the total commitment.

Check the RV of your EV

‘Residual value’ is the estimated market value of the vehicle at the end of the lease term. High residual values generally mean lower monthly payments. But what if you fall in love with your EV and decide to buy it post-lease? A higher residual value might make the purchase price slightly higher than EVs with lower residual values. There’s unlikely to be one-size-fits-all here, but you’ll be able to make an informed decision if you factor this into your choices.

Care about the care plan

It’s hard to think of any machine that doesn’t need careful maintenance. No matter what kind of car you drive, there’s always a risk of bumps, scrapes and breakdown. Checking the maintenance plan and warranty carefully to see who is responsible for maintenance tasks and potential repair costs can give you peace of mind. Some dealers may offer a more comprehensive plan at a higher cost – worth considering for added reassurance and to defend the residual value.

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Know where you are with wear and tear

Related to maintenance is wear and tear. This is the expected deterioration of a vehicle, as opposed to specific damage from isolated incidents like bashing your alloys on a kerb or denting the bumper by reversing into a bollard. Be sure to quiz your dealer on their standards and make sure it’s clearly communicated in your agreement. When it comes to handing the keys back at the end of the deal, their wear and tear terms could result in an additional cost.

Make an exit plan

When leasing an EV, have a think about when and how you might end your lease, and ask your leasing provider what your options are. Some may provide flexibility on when you hand your EV back which gives you flexibility on return dates. Others may offer purchase options once you get to the end of the agreement. Another option might be purchasing a newer model from the dealer. Paying attention can pay off.

So now you know. Or do you?

Leasing an electric vehicle could be your ticket to enjoying cutting-edge technology without owning it outright. With thoughtful consideration of the points above, hopefully you’ll feel ready to glide into the world of EV leasing. But it’s worth reiterating that deals and contracts differ. If you want to be in the driving seat when it comes to finalising your deal, ask the dealer to be absolutely clear on what’s involved in your EV leasing contract. And once you find the best deal for you, be ready with the bp pulse app to find the best rates on public charging.

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