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Should you buy or lease an electric car?

It’s a big decision with lots to consider. Let us take you through some of the differences when you buy or lease an electric car…


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To buy or not to buy?

With plenty of gleaming brand-new models in the showrooms, you might wonder why you or your business should lease an electric vehicle instead of buying. It’s a good question: there’s nothing quite like the warm glow that comes with ownership. Or is there?

One good reason to take an electric car lease, not buy, is the capital outlay. People often perceive buying and leasing a car is similar to buying and renting a house. But that’s not really true. Purchasing a house is usually (but not always) a sound investment: purchasing a car may not be. And electric cars usually cost more than their petrol or diesel counterparts. Their high-capacity batteries and the technology that translates all that power into motion doesn’t come cheap. Even a mid-range car such as the Hyundai Kona 64kWh will cost you in the region of £33k (Sept 2023).

New cars typically depreciate quickly

Also average rates of depreciation are around 15-35% in the first year and considerably more after that. The instant you drive a new car off the forecourt it loses a hefty chunk of its value. And that’s a lot of money to lose when you come to resell it.


Electric car lease types

There are two main types of car lease – Personal Contract Hire (PCH) and Business Contract Hire (BCH). The first is where an individual enters into a lease agreement with a leasing company, such as CBVC – which works with ElectriX. The second is where a company enters into an agreement with a leasing company to provide its staff with cars. There’s also Personal Contract Purchase (PCP) that allows the individual to pay for a car over a fixed period of time, with the option of buying the car at the end of the term.

ElectriX is also offering salary sacrifice. This is where an employee has the monthly leasing fee deducted from their wages at source, from their gross salary. Even though the employee has to pay benefit-in-kind (BiK) tax, there are significant savings, as the employee’s overall tax bill and National Insurance payments will be lower. ElectriX now offers the most flexible salary sacrifice scheme on the market, with different levels of risk protection tailored to the employer’s needs.

Leasing a family-sized electric car like a MG4 Hatchback can cost from as little as £256.04 per month on PCH (as at February 2024). Or take a high-end electric car such as the Tesla Model Y – this can be leased from £425.80 per month (as at February 2024). And, after the contract period is up and no matter which model you’ve gone for, you hand it back with no cash payment at the end. You also have the option of getting another brand-new car of the same model, or an entirely different one, by which time technology will probably have moved on and the car may come with even more specs.

Nissan Ariya SUV in red

Other electric car lease benefits for businesses

Leasing electric cars and vans is a particularly attractive option for businesses. With BCH business owners can lease as many vehicles as they wish, with a range of benefits, including 50% VAT redemptions for cars and vans used for work and the employee’s own use, and 100% for commercial vehicles where the vehicle is used solely for work. There are also tax savings to be had on BiK tax.

Once all the necessary paperwork is completed, ElectriX and CBVC can get you behind the wheel of a brand-new car in as little as 30 days. That’s generally much quicker than buying one. If you want a factory order where you choose some of the specs like trim and interiors, it may take a little more time. Take a look at some of our stock offers here.

Leasing an electric car also means you’ll have more control over your finances, helping you to budget. You’ll have fixed monthly costs, with some contracts also covering maintenance. ElectriX can also sort out your insurance and home charging for you.

Find out more here

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