When you’ve decided to get an electric vehicle, you might be asking yourself whether you should purchase or lease. Each option has its own set of pros and cons. Depending on your budget and lifestyle, one may be better for you than the other.
The short answer is yes. You can get up to $7,500 in federal tax credits depending on the type of electric vehicle or plug-in hybrid you lease or purchase. In addition, you may also qualify for up to $7,000 in tax rebates from the California Vehicle Rebate program for qualified low-income individuals. If you are leasing a car, dealers tend to factor in the rebates into their lease payments, indirectly passing on the discounts to you. It may be more advantageous to lease a vehicle if your expected income tax is too low to use the federal tax credit, as the credit can be passed onto the dealer who may indirectly offer a lower lease price to you.
As technology rapidly improves, leasing has become a popular and cost-effective method of driving electric. By leasing a car, you can upgrade to a newer model with better improvements, such as longer range and greater battery capacity, more easily by switching vehicles after each lease. Leasing also helps protect yourself against battery capacity loss since you can switch to a new vehicle after each lease and protect yourself against unknown or low resale value for used vehicles.
Leases tend to have restrictions on the mileage you can have on your car. If you plan on driving your electric vehicle over long distances, it may be better to purchase to avoid excess mileage fees.
If you have a higher credit score, dealers may be willing to offer lower prices on leases of an electric vehicle.
The majority of our clients lease their cars. The main reason for this is quickly improving battery technology. The same model EV you purchase today will have significantly improved battery range in 3 years which will take you twice as far. Knowing this, many EV drivers decide to lease for 36 months, then trade up to the next generation.
Dealerships offer a wide variety of EV leasing and purchasing plans. CURRENT EV keeps an inside track on the arrangements being offered and can let you know what all the options are.
The graph below shows how you can achieve dramatic savings of $5,920 over 36 months by leasing an electric-powered car:
The graph below provides the best reasons for purchasing or leasing an electric vehicle:
To attract customers to the Pure Electric World, Hyundai is offering a unique reimbursement package for its Ioniq pure electric model. The base model Ioniq is available for lease at around $275 per month before electricity reimbursements. How does the program work? The company keeps track of the number of miles the car has been driven, calculates the cost of the electricity needed to drive that distance and automatically deducts that amount from the next lease payment. Lease a plug-in Ioniq, and Hyundai will pay for the juice required to run it. The com- pany estimates that a commuter driving 30 miles a day would see his lease rate drop by $41.40 a month. That’s almost $500 a year, almost $1500 over a.3 year lease.
When we discuss the options with our clients, the majority decide to lease. A CURRENT EV advisor will analyse your budget and lifestyle needs, lay out the pros and cons of leasing and purchasing, and offer insights concerning your best choices.